Are you planning to exchange money on your next vacation? Do you have any future travel plans? If you answered yes to these questions, then you need to keep reading! At Currency Converter, we are experts in currency exchange, and we’ve put together this article to help you get the best rates on your money exchange. So read on, learn more about currency exchange, and get the most bang for your buck on your next trip!
Why is it important to be aware of currency exchange rates?
The problem with foreign exchange, or Forex as it’s known in financial circles, is that unlike commodities such as gold or oil, currencies are not limited by supply. In other words, a currency’s value is set by demand: The more people who want it relative to those who have it, and vice versa, the more its price goes up. Because no one manages Forex like they do stocks or precious metals (no one buys stocks expecting their price to go down) everyone can be in control of currency valuation – at least indirectly.
How does currency conversion work?
When you buy goods or services from another country, you’re converting your local currency into a foreign one. That transaction requires money—and that’s where currency exchange comes in. In order for international commerce to take place, sellers must be willing to accept your local currency as payment for their goods or services. A currency exchanger helps facilitate transactions by purchasing and reselling foreign currencies on your behalf. Currency exchanges also let you get better rates when buying and selling foreign currency than if you went through a bank, which usually has its own set of rules and rates.
How does international forex trading work?
Forex is all about supply and demand. When people want a particular currency, they buy it, driving up its value. The higher a currency’s value, or price, in other currencies — also called buying power — the greater that currency’s attractiveness. That generally leads investors to seek out investments in that currency and take it off of exchange markets, where currencies are bought and sold for US dollars. If people instead want U.S. dollars, then they’re likely to sell their holdings of other currencies back on forex markets so that they can get their hands on those U.S.
Forex market information
As a global currency, forex is valued by hundreds of thousands of investors around the world. The foreign exchange market processes trillions of dollars in trade every day and does so 24 hours a day, five days a week (from Monday at 6 p.m. Eastern time to Friday at 4 p.m.). Because of its global nature, business professionals from nearly every industry may have some sort of connection with forex markets. Whether you are dealing with foreign customers or planning business trips abroad, learning about currency exchanges can be extremely valuable in your career and personal life alike.
Which currencies should I convert from/to?
You should only convert from/to currencies in which you have a trading interest. If, for example, you are a Swiss investor who regularly trades stocks on Swiss exchanges and is looking for income outside of Switzerland (where rates are low), then converting from Swiss Francs to euros might be helpful. Or perhaps you invest in Japanese equities and hold Japanese yen in your account as well—then you might be interested in converting your money back into U.S. dollars at some point. In general, make sure that any currency conversion you do is purely out of interest or need and not based on speculation or even hoping for favorable rates; after all, there is no guarantee that converting one currency into another will yield better returns than just leaving your money alone!
Where can I get the best rates on currency conversion?
Depending on where you live, it can be difficult to find a currency-conversion service that offers better rates than your bank. However, if you live in Canada or another country with a high foreign-exchange demand, you’ll likely have no problem finding an alternative. One of these alternatives is Money Transfer International (MTI), which helps customers convert their money into USD for about 2% of the total conversion amount. That may not seem like much but when combined with wire fees and currency exchange fees, it quickly adds up.
Quick guide to pay attention when converting your money
Currency conversion is one of those things that most people have a need for at some point during their life, whether they’re a business owner, investor or regular traveler. But what many don’t realize is that currency conversion should be approached with caution because credit card companies tend to favor their own exchange rates over wholesale ones. To keep your money where it belongs—in your pocket—read on for our complete guide to currency conversion. You can also download our free currency converter app from Google Play and iTunes today. Download Now!
How to use our Currency Converter (an example)
When traveling, it’s important to understand how currency exchange works. If you just buy and sell foreign currency on the day you arrive in a country, you will often get a very bad deal (about 3% worse than if you had waited until your last day before leaving). To make sure you get a good rate when buying or selling foreign currencies, use our Currency Converter tool. By using it for several weeks before your trip and then again once you are abroad, you can find out what’s an average rate and determine when would be best to buy or sell. This way, if rates fluctuate during your stay (for instance due to election results), at least one of these actions will likely prove profitable for you.
Additional Resources
Currency conversion (noun) is a practice in which one currency is exchanged for another. While it happens automatically when paying for something with foreign credit cards, sometimes you need to make conversions manually. For example, if you have a 401(k) with an international fund and want to figure out its value in U.S. dollars or euros, you’ll need to convert from your retirement fund’s currency into your home currency—you can do that by yourself at no cost (or commission). Take note of these tips before converting currencies on your own
