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Understand and Profit From the Currency Exchange Rate

Whenever you are looking to buy a different type of money, whether this be for travel, investment or another purpose, you must understand how the currency exchange rate works. This is simply the fluctuating prices of various types of currencies, expressed in another currency. In other words, the currency exchange rate tells you much of a particular currency you can buy, using another type of currency. Knowing how this system works can save you a lot of frustration, especially when first looking at the currency exchange rate.

Basic explanation of currency listings

You will normally see two numbers when looking at the currency exchange rate. In the case of the Pound discussed above, this might be .59467 and 1.68161. This means that for every dollar you spend, you would be able to buy .59467 Pounds. It also means that you would need to sell (or trade in) 1.68161 Pounds in order to receive a single US dollar. That is how to look at the currency exchange rate. Also, understand that the currency exchange rate for the Pound can be expressed in terms of dollars, Euros, Swiss francs, Japanese yen, or any other type of money you wish.

The currency spread

You should also be familiar with the currency exchange rate spread when looking to buy and sell foreign money. This is the way your broker or dealer will make money. Continuing with the example of the Pound (and listing in dollars), you might see a typical spread expressed as 1.72 and 1.64. This simply means that you can exchange $1.72 to buy each pound, or give the dealer £1.64 for every dollar you wish to receive. According to this currency exchange rate spread, the dealer makes .08 Pounds for each dollar-Pound exchange, or a profit of eight percent.

Trading currencies based on the spread

Many people looking to get involved in currency trading or investing do so without a very clear understanding of this currency exchange rate spread. Whatever spread you are able to find will greatly influence how likely you are to make money on this venture. In the example listed above, the currency exchange rate would need to move at least eight percent..and that would only ensure you break even. Fortunately, the Xchange of America always offers their customers some of the best spreads and provides amazing value at the lowest possible prices. Contact XChange of America for more information on purchasing currency or to ask any questions at all.

How to Buy Foreign Currency Quickly and Easily

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Many Americans have never had the opportunity before to buy foreign currency. There have traditionally been a lot of reasons for this, like not taking many foreign vacations, or only wanting to use dollars for investment and savings. However, many of these old rules are changing and more Americans are looking to buy foreign currency. Before just jumping in and signing up with the first exchange or broker you find in the phone book or online, learn some tips about how to buy foreign currency quickly and easily.

Know the exchange rates

This is a very important point when you buy foreign currency. You must know the current exchange rates. Most of the time you can find a neutral website (one that is not looking to actually facilitate your purchase of paper money) that will give regular updates on exchange rates. From here, your provider of choice can be compared to the actual rate. Obviously when you buy foreign currency there is no sense in overpaying, so stay as close to the neutral exchange rate as possible.

Watch the spread

Just like when buying or selling stock, there is a spread with currencies. When you buy foreign currency, you can expect to pay a higher price to obtain the money and then a lower price when you go to sell it back. This is normal and how the broker or dealer makes their money. For example, you might be quoted 1.39 and 1.30 for the price of Euros, in dollars. That simply means that you can buy foreign currency at 1.39 dollars for every Euro and sell each Euro for $1.30. The spread in this case is .09 Euros. The dealer makes a profit of 9 Euros for every 100 that they exchange back and forth, or 9 percent.

Buy foreign currency online

In many cases, your supplier will allow you to buy foreign currency directly online (as well as in person). While this can be an incredibly convenient service, you still need to watch out for some things. You should never pay any additional fee to buy online. Also, make sure that the company has a strong reputation for successful dealings with their customers. This is what makes the Xchange of America a great place to buy foreign currency online; they meet all the requirements and always provide you with great value at the lowest possible prices. Contact XChange of America today for more information on how you can save money on your next currency purchase.

Best Ways to Buy Foreign Currency Online

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Maybe you have decided to take a trip to a foreign country. Or pursue some investing using other currencies. Whatever the reason, it can be helpful to know how to buy foreign currency online. There are a number of different brokers, dealers, and sellers of all types who claim to be willing and able to help you buy foreign currency online. Unfortunately, many of them really do not have your best interests at heart. Here are some ways to protect yourself.

Finding a trusted provider

Whenever you buy foreign currency online, the first order of business is to ensure that your provider of choice is trusted. Pick a merchant who has actually been in business for a while and has a solid track record of success. They should have a lot of positive comments about the experiences of others who also buy foreign currency online. The Xchange of America is one example of a trusted supplier who has just such a reputation for success and fair dealings with all their customers.

Watch out for fees and hidden charges

Another trick that many brokers and dealers use is to add in hidden fees and charges when you go to buy foreign currency online. Already they are making money on the spread, selling to you at a higher price and then buying back unused paper at a lower price. Many also add in commission to buy foreign currency online; some even include online fees or other little charges that are not only don’t make sense, but they are written in fine print with the hopes that you will not notice. That is no way to do business. Avoid any dealer that has hidden fees when you buy foreign currency online.

Make sure they offer your currencies

Another big issue when you buy foreign currency online can often be availability. Despite listing out many different types of currencies and countries, when you actually try to buy foreign currency online, you will receive the message that they currently do not carry that type of paper. This happens more often than you might think. So, it becomes important to test the provider ahead of time. Fortunately, a company like Xchange of America always has a good supply of a wide range of currencies.

Many services

You should also look for many types of services. Xchange of America satisfies allows you to buy foreign currency online using layaway as well as a number of different payment methods.

Top Reasons to Buy Currency

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There are a number of reasons to why you might want to buy currency these days. This is essentially the act of converting your dollars into the paper money of another country or group of countries like the Pound or the Euro. When you are looking to travel to a foreign country, consider ways to buy currency ahead of time. Another excellent reason might be for investment purposes, since the rates for various currencies will fluctuate. You can buy currency with confidence from Xchange of America without service fees.

Buy currency for travel

Imagine arriving at a foreign destination, getting off the plane and then discovering your only option is to buy currency through a high-fee airport broker? Instead, consider using a service like Xchange of America, which allows you to buy currency before leaving on your trip. Then travel with confidence, knowing that you will not be forced into using an unfavorable exchange rate. They even guarantee to back anything that was unused after your trip is finished, so you don’t need to worry about purchasing more than you will use.

Using currency for investment

Another great use of and reason to buy currency is as an investment. This is almost like trading stocks and bonds, except it is with actual paper money. You can go ahead and watch the fluctuations, then buy currency of a particular country when it is at a low valuation compared the dollar. After the purchase, watch for that currency to rise in value against the dollar and then sell it, pocketing the difference between your buy and sell price. This an be done using many different foreign currencies, so having a solid resource like Xchange of America backing you up is a great help in this type of investing.

Buy currency for speculation

You could also try to buy currency for sheer speculation. Of course, it should be emphasized that you never want to use money that has been already allocated for other purposes. While speculation can be highly profitable, it also carries a certain added element of risk. The idea behind using currency as a tool for speculation might involve buying a little-known or thinly traded currency in the hopes that soon other investors or traders will recognize the value and buy currency as well, driving the price up so that you can get out with a tidy profit. A good speculation has the potential to gain a lot of money, if done right.

How to Save Money With Foreign Currency Exchange

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Before you visit a currency exchange to purchase money for your next trip, you need to carefully monitor foreign currency exchange rates over time to try to get the most favorable rate possible. Rates fluctuate rapidly for foreign currency exchange rates depending on the country, and you should strongly consider picking a country to travel to based on the foreign currency exchange rate with your own country’s currency. Americans and several European countries benefit from a strong dollar and Euro compared to the currencies of several other countries, however the actual cost of traveling needs to be factored into the equation including the plane ticket costs and daily costs of entertainment at the destination country.

Time your foreign currency exchange purchase properly

If you plan on converting a large amount of your own currency into a foreign currency, you really need to be careful at planning the best time, when your country’s foreign currency exchange rate is at the highest value possible. Values do fluctuate rapidly, and you will often need to speak with a foreign currency exchange expert who can advise you on the proper timing and how to plan for large volume purchases for travel or other purposes, unless you are familiar with currency exchange yourself.

Use the same currency exchange to save money if you purchase multiple times

Services like Xchange of America can offer you discounts or incentives if you regularly need foreign currency exchange services due to living in a foreign country or regular travel. So, in addition to watching the foreign currency exchange rates you should also do business with one particular provider as another way to save money over time, especially if you think that you will be buying foreign currency multiple times. You can also save money on shipments by purchasing your foreign currency all from one service.

Get the advice of experts regarding foreign currency exchange

There are many factors involved in determining the right time to purchase foreign currency, and the right amount. If you aren’t sure how much you will need for traveling purposes, or if you are trying to make an investment, you can always contact Xchange of America for more information and advice on the right time to make a purchase. The complicated factors that regulate the value of a foreign currency need to be taken into account, and you can definitely benefit from getting advice if you are new to foreign currency exchange. Call Xchange of America if you have any questions about ways to save money on currency exchange services or if you wish to purchase foreign currency online anytime.

A Currency Exchange Can Help Travelers Buy Currency

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Currency exchange, also known as foreign currency exchange, Forex or FX, is the business of exchanging one currency for a different currency. A currency exchange service allows a person to buy currency for any country they are traveling with a service fee tacked on. Each service will have a different rate, and typically the services that a person will encounter during their travels will be at a much higher rate because of the convenience and necessity. Travelers should buy currency at a currency exchange before traveling as a way to save the most money. Services like Xchange of America offer more favorable rates than train station or airport currency exchanges, and can save a traveler a substantial amount of money. Xchange of America also does not charge a service fee in person, online or on the phone.

Currency exchange is important for having cash prior to traveling

It is a good idea to buy currency for a destination country in the form of cash prior to traveling. In a foreign country, there can be many vendors if not every vendor that will only take cash payment in their own country’s currency. Those who would rather buy currency after they arrive at their destination run the risk of not being able to pay for important services like taxi fares, hotels, food, and other forms of transportation. They may also have to pay excessive premiums to convert their currency to a foreign country’s currency once they arrive to their travel destination.

Currency exchange services allow travelers to buy currency and have it shipped directly to them

Travelers or those who wish to buy currency for investment purposes can have their foreign currency shipped directly to them with services like Xchange of America for a small shipping cost. This is convenient because it saves time and an actual trip to a currency exchange. If more than enough currency is purchased for the trip the first time, there won’t be any need to use an exchange service while traveling and travelers can save a substantial amount of money on service fees this way.

Travelers can buy currency online or in person

Xchange of America has physical storefronts in Kansas, Florida, Minnesota, Tennessee, and California and travelers can visit these storefronts to buy currency without having to wait for shipping. There is also the option to buy currency online with expedited shipping times if time is of the essence, or normal shipping times as well, and the currency will arrive within a few days or sooner with expedited shipping.

Extra Cash After You Buy Foreign Currency Online?

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Using leftover money after you buy foreign currency online can be tricky because you might not be sure what the best use of it really is. If you buy foreign currency online and have a smaller amount of leftover money you can always keep it as a souvenir as mentioned in the previous blog post, but there are several other good uses for leftover travel money.

Keep it for your next trip

One of the best uses for leftover travel money is to keep it for your next trip. If you plan on visiting a country more than one time in the future you should definitely consider using it for this purpose, as you won’t have to convert the currency back to your home currency and spend more money on another currency exchange. If you have a lot of currency left you may not even need to buy foreign currency online before your next trip.

Donate it

If you find that you have a lot of money left after you buy foreign currency online, you should consider donating it, and most charities will accept many different types of currency. Just contact your favorite charity and ask them what they recommend you do with the foreign currency that you want to donate, they may ask you to convert it to a different currency or they may just take it as it is. There are also ways to buy foreign currency online for the purpose of donating to an overseas charity, so you may want to ask about that if your favorite charity is overseas.

Give it to a family member or friend for their trip

If a friend or family member is traveling to the country that you just visited, you can help them out with their trip expenses by giving them a little extra currency. It will be appreciated, and at least in the United States you are legally able to gift several thousands (USD) per year without tax consequences.

Think about how much you’ll need the next time you buy foreign currency online

Try to predict more accurately how much money you need the next time you buy foreign currency online or at a currency exchange and you’ll have less left over after your trip. Sometimes you don’t really know how much you really need and may have to learn from experience, but if you carefully plan out your travel budget you won’t have much left over after you buy foreign currency online.

More Countries With a Favorable Currency Exchange Rate for the US Dollar

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There are several countries that offer an undervalued currency exchange rate compared to the U.S. dollar, meaning that the U.S. dollar gets more of that particular country’s currency per dollar than it would for other countries, and that the cost of travel is cheaper for those particular countries. Travelers from the United States benefit from a strong dollar in several countries, but not every country is affordable for American travelers. Knowing which countries offer a favorable currency exchange rate is a good idea before planning your next trip, especially if you are on a budget. Even if you have the money you can plan a more luxurious trip if you travel to a country with a favorable currency exchange rate.

Vietnam offers a great currency exchange rate with the U.S. Dollar

Vietnam offers a great exchange rate with the U.S. dollar, and the Vietnamese Dong is one of the currencies that has become much weaker against the dollar in recent years due to several factors. The currency exchange rate has become much more favorable, and travelers to Vietnam from American can typically get by on spending just a few dollars each day for everything including guest housing, food, and transportation. The cost of goods has risen in recent years but the dollar is still powerful due to the Vietnamese dong having a weak currency exchange rate against the dollar.

Greece’s economic crisis has made the country more affordable

The recent economic crisis in Greece has resulted in prices for its hotels, restaurants, and tourist attractions dropping dramatically, even though the country uses the Euro which normally has a favorable exchange rate with the U.S. dollar. The crisis has resulted in prices for many dinners falling to around $10 USD and hotels being available from $15 to $30 USD per day, and a luxurious night in Greece may cost just about $50-$75 dollars whereas other European countries would be much more expensive.

The U.S. Dollar has a favorable currency exchange rate in Budapest

Budapest, Hungary is regularly rated as being one of the most affordable destinations for American travelers due to affordable prices. Hotels are just 6 to 12 Euros per night and meals can be purchased for just a 1 to 2 Euros from street vendors. Budapest also has several great tourist destinations, and a trip to the country can be very affordable for American travelers that can benefit from a more favorable currency exchange rate with the Euro in recent years.

Tips for Leftover Currency After you Buy Foreign Currency

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After you buy foreign currency and complete your travels you’ll often be left with extra foreign currency. There is a lot that you can do with leftover foreign currency, and there’s no point in just letting it sit there or go to waste when there are plenty of uses for it. Here’s what to do after you buy foreign currency and have some extra left over after your trip.

Convert it back to your original currency

You can always convert foreign currency back to your original currency at a currency exchange, even after you buy foreign currency. The exchange rate will be based on the rate for that particular day, and although there may be a fee to convert it back, at least you will be able to use the currency in your home country. Even if you decide to travel back to the same country in the future you can always buy foreign currency for that country prior to your trip. You should definitely consider doing this if you buy a large quantity of foreign currency and find that you have more than what you expected left. You can convert foreign currency back to U.S. dollars and other currencies at Xchange of America.

Keep it as a souvenir

Foreign currency makes a great souvenir and you can keep a bill or coin of every denomination from your travels. Even if you buy foreign currency and then convert it back to your home country’s currency, you might still consider doing this. If you travel often, you can make a souvenir scrapbook with all of the different foreign currencies that you purchase included. Often times foreign currency will change some time after you buy foreign currency and the currency that you keep might end up being somewhat rare.

Don’t sell them at an airport currency exchange

An airport currency exchange will normally buy back any time of foreign currency that you bring back from your trip, but they generally offer very poor exchange rates. You are better off finding another purpose for the money you have left after you buy foreign currency. There are also plenty of local stores like Xchange of America that will offer you far better rates than most airport currency exchanges. If you aren’t sure, you should simply save your foreign currency so you don’t have to decide what you want to do with after you get back as long as you don’t have a large quantity of it.

More Foreign Currency Exchange Rate Influences

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There are a wide range of factors that influence foreign currency exchange rates, and we have discussed some of them on this blog. Foreign currency exchange rates are complicated and are influenced by many different factors as previously mentioned including interest rates, speculation, debt, economic instability, and more. All of these factors combine to influence foreign currency exchange, and the market can be quite volatile and rapidly changing. Getting familiar with the different influences on foreign currency exchange can help you determine when to buy a foreign currency and whether or not it is overvalued or undervalued based on these factors.

Deficits influence rates for foreign currency exchange

A country that currently has a deficit will have its foreign currency exchange rate impacted, usually negatively. A deficit shows that a country is importing more than it is exporting, and it is a sign of economic weakness. As a result there will be a lower demand for that country’s currency, and the country has to borrow foreign dollars in order to pay for its imports which increases demand for other country’s currencies. This is one of the major factors that influence the value of a foreign currency exchange, and many countries have had their currency values suffer due to running a consistent deficit over a period of years, but obviously there are many other factors involved.

Economic or political instability

Economic or political instability is one of the major factors that influence the value of foreign currency exchange; countries that are more politically unstable attract fewer investors because the environment is not conducive to business or economic progress. Economic stability shows that the country’s currency may not represent much in terms of purchasing power, especially if the country has a low gross domestic product and a low amount of experts.

Government intervention affects foreign currency exchange

Governments often intervene as a way to balance or tilt the value of a foreign currency into a more favorable direction. For example, the Chinese government has helped to close the “trade gap” with the United States by slowing the appreciation of the Yuan against the U.S. dollar through several interventions including buying U.S. dollars and purchasing U.S. treasury securities, as a way to keep surpluses of dollars out of exchange markets. Dollar surpluses would cause the Yuan to rise in value against the dollar, which is undesirable because China benefits from a strong dollar, and a weak dollar compared to the Yuan would lead to decreased imports from China.