95

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 ...


80

assuming the currency value with respect to USD stays stable in that year. This is where your analysis breaks down. The fact that the foreign bond pays a higher interest rate indicates that the currency will weaken relative to the dollar over the year, otherwise many investors would buy these bonds as an arbitrage opportunity, driving the price up (and ...


72

You don't need to be an economist to shop something. I just did some quoting of USD to EUR The daily wholesale close: 1.1251 The daily rate from Visa: 1.121988 The quote from my brick and mortar bank: 1.1794 The quote from the Travelex to pick up at my local international airport: 1.2335 For starters, you don't get the wholesale price in a retail setting (...


42

The Financial Services (Distance Marketing) Regulations 2004 say in Section 11: Subject to paragraphs (2) and (3), regulation 9 does not confer on a consumer a right to cancel a distance contract which is— (a) a contract for a financial service where the price of that service depends on fluctuations in the financial market outside the supplier’s ...


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.


38

Financial institutions are subject to additional reporting requirements where they deal with U.S. persons (→ FATCA). Many institutions therefore decline potential customers that are U.S. persons, either because the effort is uneconomical or because they are not allowed by local laws to report that data to the U.S. U.S. persons are not only U.S. citizens, ...


32

Because currency risk is not the only risk in this scenario. The risk of the developing country (the state) not servicing their obligations are the bigger risk, hence the very high interest rates. Think of it as investing in High Yield bonds (junk bonds) - interest is high because risk is high. Rating agencies rate countries (like they do corporations) for ...


23

I don't know about other markets, but for travellers based in the UK going to popular destinations, the most competitive card providers give slightly better value than the most competitive cash providers. Both cash and card processors can charge you money for the service of converting currency in three ways: A fixed fee per transaction. A percentage ...


19

The other answers are correct, but I would like to explain the problem from a different perspective: When some scheme seems to offer you free money for nothing, then you should always ask yourself why someone offers you that scheme. Why would a foreign government offer you to give them a loan with a high interest rate when they could just as well give you a ...


12

It doesn’t Dual-listed companies are more complex than you think. They are not a single company listed on two exchanges, they are two separate companies that have claims of the cash flow of the same business under the terms of their equalization agreement. So you can’t buy a share on one exchange and sell that same share on the other. In theory, because ...


10

Anyone who wants to buy something from Zimbabwe or pay taxes in Zimbabwe will need to buy Zimbabwean dollars. A company in Zimbabwe that pays its workers in Zimbabwean dollars but sells products in US dollars will need to buy them too. Because there is an existing economy in Zimbabwean dollars, one has to buy the currency to be part of it. If the economy ...


10

It is probably inefficient to buy foreign currency at home to cover the standard big expenses of travel, but it can be incredibly useful to have a small amount of local currency to cover things like buying a bottle of water or an amazing souvenir from a street vendor or a merchant you don't trust with your credit card, making a small donation at a religious ...


10

You can't measure something without a yardstick to measure it by. Remember that there's pretty much only one thing you can do with currency: buy something. The value of a currency is its ability to buy other things. So: If you're interested in the pound's ability to buy other currencies, look at exchange rates. If you're interested in the pound's ability ...


9

The drop in the value of the pound because of Brexit happened in June 2016. All price movements since then are against a baseline price that already takes Brexit into account, and largely reflect markets’ changing views of the likelihood of hard/soft/no Brexit. It’s gone up a bit recently because the chances of ultra-hard (no deal) or hard (May’s deal) ...


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, ...


9

If the shares are fungible between the exchanges, you are correct that the prices will be kept nearly equivalent by arbitrage. The missing piece to understand how the price reacts to currency fluctuations is the fundamentals of the company. This applies regardless of whether the shares are traded in a single currency or multiple currencies. It's a matter of ...


8

To give a slightly fatuous but technically correct answer: Is it more economic to pre-purchase currency before travel, or use ATM cards / credit cards when abroad? If you find yourself somewhere that only takes cash (and pace the comment you quote, even in 2019 (!) such places do still exist), then all your fancy plastic and electronics gets you a ...


8

A life of luxury? Not really. No matter where you live, luxuries will include many components that are imported from other countries. You'll have to pay for those with now weak Argentinian Pesos, so they'll be very expensive. When you arrive your purchasing power might make domestic Argentinian goods very attractive, but Argentina's inflation rate is now ...


7

Price is everything. There is a price high enough that the best asset will be desired by no one, and a price low enough that the worst asset will be desired by everyone. If the price is constrained (e.g., by an official exchange rate), then there may indeed be no natural buyers. Governments that maintain unrealistic exchange rates for their currencies do ...


7

I frequently travel abroad. Depending how often I am (and my ties to a particular country) I handle money when I get there in any of the following ways: In some countries I have a local bank, so I can perform some local transactions (particularly withdrawing cash from an ATM) in local currency. I can transfer money to those accounts ahead of time if I ...


7

Forex markets are closed on weekends, so the prices are stale.


7

I have a gold mine in my back yard (pls keep this a secret). I know that I'll have 100 oz by 12 months from now. As a hedge position, I sell one future contract. I've locked in my sale price, and I no longer worry that the price of gold will drop before my 100oz is mined and ready for sale. A speculator is on the other side of that contract. In effect, he ...


6

CapitalOne is using the day after the date you have listed on your spreadsheet. For example, for your first transaction of 43 SGD, you have a date of 12-Oct-2018. However, if you plug 13-Oct-2018 into Visa's Exchange Rate Calculator, you'll see that it gives you the same USD price as CapitalOne charged you. The discrepancy in date might be related to the ...


6

I think you're comparing apple and oranges a little bit. XE is just showing you "mid-market" rates (half way between the bid and ask rates) and even has a disclaimer: All figures are live mid-market rates, which are not available to consumers and are for informational purposes only. In reality, all wholesale market FX transactions have a bid/ask spread ...


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 ...


5

Perhaps this may be helpful to think of in terms other than currency. It seems obvious that gold bullion is more valuable than rice. So, if you have some rice to sell, and get gold in return, it would seem that you've won out. You gave something less valuable and got something more so; the other person gave something valuable and got something less so. ...


5

I'm not sure you can generalize this. Even getting Euros varies from country to country. I got a very fair rate (in comparison to the wholesale rate) at ATMs in Ireland, and about 5% worse in Portugal (forced conversion at an unfavorable rate). Spain allowed my bank to convert but imposed a relatively high fee of a few Euros on each withdrawal. And that's ...


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 ...


4

On April 10th of this year, I paid for a hotel in Ireland with my credit card issued by a well known issuer (and advertiser) of "no foreign transaction fee" credit cards. The hotel cost €241.20 and my issuer converted that to $272.31, an exchange rate of 1.1290. XE's sister site X-Rates reports that the exchange rate on that day was 1.1267. So I got a ...


3

Yes a dual citizen can open account at crypto exchanges using the non-prohibited ID. At time of writing, crypto exchanges that are not operating as a financial institution (bank, broker dealer, organization legally defined as a financial institution) do not have to deal with FATCA requirements. And US citizens that only have balances of crypto assets on ...


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