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When dealing with currency exchanges, it's important to remember that only the local currency is "money", all the other currencies are just "things". This is the reason behind the "buying"/"selling" terminology you often see. When you change foreign currency into local currency - in the view of the currency exchange - they are buying your strange pieces of ...


40

Because it is physical money. They need to handle it. And they may simply not be able to as easily and as efficiently offload 5 USD bills compared to 100 USD bills. Result is a different pricing structure.


15

If you didn't have a stop loss set (or trailing stop loss) then an equally random spike in the other direction could have obliterated your account and put you in debt to the broker, depending on the terms of that broker, as these are highly leveraged positions. Market anomaly? If your currency bet was unrelated to the fed's interest rate decision today, ...


12

When you hold units of the DLR/DLR.U (TSX) ETF, you are indirectly holding U.S. dollars cash or cash equivalents. The ETF can be thought of as a container. The container gives you the convenience of holding USD in, say, CAD-denominated accounts that don't normally provide for USD cash balances. The ETF price ($12.33 and $12.12, in your example) simply ...


9

Yes, there is indeed a great alternative for all European residents: getting a Revolut account. Revolut is a fully-online bank who's main benefits include the lack of fees (with some limits) and a great exchange rate for all currency operations (better than what you would get at any brick and mortar bank in Europe). In your particular scenario it would work ...


9

It sounds like the money exchanger is making up a reason why you're not getting the advertised rate, independently of the notes that you actually have on you. So they're basically scamming you. That's not exactly unheard of, especially on airport locations. It helps to shop beforehand to find the best rates. Some locations even offer to lock in the rate, ...


7

You could use a Credit or Debit Card running in US $, drawing from your US$ account, and pay everything with it. If you pick a company with free foreign conversions, you would get the standard interbank exchange ratio every time you pay, with no fee. For the small payments where credit cards are not accpeted or useful you can convert some cash once every ...


6

There is no 'authority' that calculates it, it is offer and demand. Millions of people and organizations buy and sell currencies continuously, and they are willing to buy or sell for a certain price, and that defines what the current price is. Very similar as if you sell your truck to some guy, and you discuss and agree on a price - just more people, more ...


5

I think your concern is equivalent to someone performing a currency exchange on Monday at one rate, and then wishing they had done it the following Friday because the exchange rate became more favorable over the week, so they've ostensibly "lost" money. The moment you buy the DLR, you're locked in at (very close to) the spot exchange rate, since DLR and DLR....


5

Cheaper and faster are usually mutually exclusive. If you want faster, nothing is faster than cash. I would recommend using an ATM to withdraw cash from your USD account as Florints and then use as appropriate. If you want cheaper, then the cheapest currency conversion commonly available is foreign exchange / transfer services like OFX / XE Trade / ...


5

why should I have any bias in favour of my local economy? The main reason is because your expenses are in the local currency. If you are planning on spending most of your money on foreign travel, that's one thing. But for most of us, the bulk of our expenses are incurred locally. So it makes sense for us to invest in things where the investment return ...


5

If it were different, then this would produce something called "arbitrage". When arbitrage appears, it generally disappears rather quickly as people take advantage of it. For instance, suppose that Eur -> USD -> Inr gave a better rate than Eur -> Inr. Then what would happen is that people would use Eur to buy USD, use it to buy Inr, then use the Inr to buy ...


4

We face the same issue here in Switzerland. My background: Institutional investment management, currency risk management. My thoughs are: Home Bias is the core concept of your quesiton. You will find many research papers on this topic. The main problems with a high home bias is that the investment universe in your small local investment market is usually ...


4

I noticed the buy/sell board table. Where did you notice this. Generally for a pair of currencies, there is Unit associated along with direction. The Unit is generally constant. These are only revised when there is large devaluation of a particular currency. Buying Php for MYR 8.52, Selling MYR 8.98. So in this case the Unit of PHP is 100, so Bank is ...


4

There's a possibility to lose money in exchange rate shifts, but just as much chance to gain money (Efficient Market Hypothesis and all that). If you're worried about it, you should buy a stock in Canada and short sell the US version at the same time. Then journal the Canadian stock over to the US stock exchange and use it to settle your short sell. Or you ...


4

Currencies go down in value over the long term, not up. This is due to inflation, the natural rising of prices. People who make money trading currencies do so by taking advantage of typically short term price fluctuations between two or more currencies. Unless you are a professional currency trader, I would recommend against trying to make money in the ...


4

Your title is: "How to offset currency exchange losses?" However your course of action could alternately make the following a more accurate title: "How to take on additional currency exposure / risk?" Remember - you are thinking of the EUR being at a 'low', but that's relative to some historical period. If EUR reaches parity with the USD, then you might ...


4

The client should lead on this, because they never paid their bill. They transferred you a number of Euros that was not sufficient to cover the bill (because their bank converted with some spread). The source bank should end up paying for this mistake if they were told to transfer USD, but your client should do the legwork as they were responsible for ...


3

Banks in certain countries are offering such facility. However I am not aware of any Bank in Hungary offering this. So apart from maintaining a higher amount in HUF, there by reducing the costs [and taking the volatility risks]; there aren't many options.


3

Use an exchange traded fund ETF, namely SPDR MSCI Japan EUR Hdg Ucits ETF. It is hedged and can be bought in the UK by this broker State Street Global Advisors on the London Stock Exchange LSE. Link here. Article on JAPAN ETF hedged in Sterling Pound here.


3

What foreign currency exchange rate is applied ? The rate applied is "Standard Rate". Different geographies / Banks call it by different names, Card Rate / Sheet Rate / TT Rates / etc. Essentially depending on the currency pair and market the Treasury function at Bank determines a standard rate that is to be used for the day. These have sufficient margins ...


3

Since you did not treat the house as a QBU, you have to use USD as your functional currency. To calculate capital gains, you need to calculate the USD value at the time of purchase using the exchange rate at the time of purchase and the USD value at the time of sale using the exchange rate at the time of sale. The capital gain / loss is then the difference ...


3

When it comes to currencies, the term "speculation" is more appropriate than "investment". "Investment" implies that you are providing financial resources for some economic activity, and receiving a portion of the resulting benefit. Investment is not a zero-sum game: if a venture capitalist invests money in a start-up that provides a service that increases ...


3

The simple reason is that they don't need and can't use liquidity; they know when they expect their foreign currency denominated cashflows will fall (within a reasonable range of dates) so they buy futures with the intention of taking delivery at maturity. OK that's not entirely true because the futures normally deliver financially rather than as an FX trade ...


3

In a word: "no". Essentially, the old adage: You don't get something for nothing. applies. If there was a way of removing risk for free (i.e. without lowering returns), then that element of risk essentially wouldn't be there in the first place (there'd be no reason not to remove it all the time). If it costs something (in lowered returns) to remove (...


3

This all depends on your risk tolerance. Preservation of capital wise just buying a basket of the stable global currencies and sitting on it will preserve capital well but lose to inflation in the medium/long term. Property is very hard to call and hedge as its a static, high deprecation asset that unless you are able to buy properties in numerous locations ...


3

My expenses wouldn't stay the same either. Maybe the liretto isn't worth as much now, but an hour of work is still an hour of work. If I tried to pay my workers the same nominal amount, even though it's worth half as much now, they would be outraged. They read the news too, after all. Your workers have a contract stating that they will paid X lirettos an ...


2

The exchange rate used should be defined in the T&Cs of your credit/debit card. If it's a Visa or Mastercard the banks will generally use Visa or Mastercard's official rate. That rate is fixed once every day. You can check the rate on their websites, for example Visa seem to use a rate which is the highest (less favourable) market price of the previous ...


2

Theoretically, it shouldn't matter which one you use. Your return should only depend on the stock returns in SGD and the ATS/SGD exchange rate (Austrian Schillings? is this an question from a textbook?). Whether you do the purchase "through" EUR or USD shouldn't matter as the fluctuations in either currency "cancel" when you do the two part exchange SGD/...


2

The exchange rate between two currencies is simply the price that the most recent market participants were able to agree on, when trading. ie: if the USDCAD is 1.36, it's because the last trade that happened where someone bought 1 USD cost 1.36 CAD. There is no one person/organization which 'decides' the rate between two currencies. The rate moves you see is ...


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