Tag Archives: currency exchange rate

Figure Out the Currency Exchange Rate

One of the most interesting economic lessons in life occurs when you travel internationally. Americans are so used to using the dollar they hardly realize that other countries have their own type of currency. Therefore, when you travel and stay somewhere other than the United States you have to use the money for that country. For example, in Britain it’s the pound and across Europe it’s the euro. When money is changed there is not always an ‘even-up’ scenario where one dollar is the same as an equal amount of the currency of the country of destination.

The cost of changing money from one country to another is called the exchange rate and these fluctuate constantly from day to day and week to week. That is because ‘exchange’ is traded on the open market and as a result the price of this currency can go up or down just like stocks or gold.

One quick lesson in exchange may occur when you cross the border into Canada or Mexico. Then you will see how ‘far your dollar goes’ when you buy or exchange your American dollar for a Canadian dollar or peso. Too, the exchange rate you receive on the market may be different than what you are offered at – perhaps – a bank. It behooves the exchanger to determine if they are getting a fair exchange. There is a way to decide this with just a little research.

The ‘currency-savvy’ are well aware that money is being bought and sold everyday by institutions and traders. It’s not rocket science, it’s a simple trade of one currency for another. Say, for example, you wanted to buy British Pounds or GBP, you would need to use another form of currency to do so. And that doesn’t mean you have to use the American dollar. Traders exchange all types of currency from all over the world so any currency is a legitimate option for exchange. Now, whatever currency is being used to buy another – together these form a ‘currency pair’. For example, if American dollars are used to buy the Canadian dollar the exchange rate would read like this: “USD/CAD pair”.

Now, if the exchange rate for this pair is perhaps 1.0888 that means that it would cost 1.0888 Canadian dollars to buy 1 United States dollars. If you look at the way the pair is written the first currency listed is meant to represent a single unit of that currency – in this case the dollar. When written out the second currency is the exchange rate or amount that is needed to buy one unit of the first currency. The formula is basic math – ‘1/exchange rate’.

For this pair the equation is 1/1.0888 = 0.91844 or in order to buy one Canadian dollar you only need less than one American dollar to make the exchange. When the exchange is made the position of the currencies is then switched – so it would read “CAD/USD”.

To learn more about currency exchanges contact Xchange of America today at 1-888-7-XOA-XOA.

Learning About Currency Exchange Rates

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When you want to exchange your American currency for another because you may be planning to travel outside the country you will usually go to a bank and get a currency exchange rate when they convert the money for you. Because the amount of the exchange is small, and you are an individual, it is unlikely you will get the same price as a trader who is making the exchange on the market. Instead, expect that the bank or currency exchange house will charge you more for the exchange. In other words they will mark up the price of the money for which you are changing. This allows them to make a profit. Expect the same treatment when you use credit cards in another country or even such companies as PayPal, a payment service provider, if you turn to them for a currency exchange.

In a previous blog we used a hypothetical example that claimed the “USD/CAD pair” was 1/1.0888 which results in the currency exchange rate being “0.91844/1” when the money is changed. However, it is very likely that the cost to buy one Canadian dollar could be perhaps as much as 1.1. The difference between the currency exchange rate and the market exchange rate is what the bank takes in in profit. There is a formula for figuring this as well. Simply subtract the two exchange rates and divide the amount by the market exchange rate – then multiple by 100.

The foreign exchange market – forex or FX – is a highly volatile and constantly changing market in which to trade. For the inexperienced trader you should know that it only takes a second to lose money. The forex is also an excellent choice for the market-savvy who understand currency trends and follow them. There is no question that currency exchange rates do follow patterns that can last days, weeks or even years, and when you know how these patterns who you can benefit from buying currency at particular times.

The FX is actually the largest market in the world in terms of volume of exchange. However, at this level the ‘players’ are generally international banks and financial centers. It is important to note that the forex or foreign exchange market is not responsible for setting or determining the value of different currencies. It only sets the market price as it currently appears when the value of one currency is demanded against another.

There are a few other points of interest for a trader to know about currency exchange rate and conversion. It is estimated that upwards of 5 trillion dollars a day occur on forex. The spread among trading institutions is generally quite tight – otherwise no money could be made. Even when banks quote the exchange rates for their best clients the corporations requesting the exchange should not expect anything more than narrow spreads. Customers who are going to travel abroad and want to exchange their money should know this in advance.

The Currency Exchange Rate is Better Online

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Have you always wondered when the best time is to purchase foreign currency is? You may think that you should just deal with it when you are already in another country but this is not wise at all. If check the currency exchange rate at an online service like Xchange of America you’ll find that the rates are much more favorable to you when you need to make a quick currency purchase from the comfort of your home.

Have Your Money Conveniently Changed

Having your money exchanged ahead of time will allow you to know exactly how much you are going to bring with you in a foreign place which is especially important when the currency exchange rate is favorable. Aside from this benefit, you can also choose the best company with the best customer service ratings. By picking XChange of America you will not have any regrets as our rates are some of the lowest in the industry and we have one of the highest customer satisfaction rates of any currency exchange service.

You only need to let us know the amount of money that you need to exchange and you will be given information on how much you can get in the process. If you agree with the currency exchange rate, you can then have the option to have it shipped right at your own home.

There’s no need to search around your town to find the right money exchange service. There’s also no need to spend extra money or spend time traveling to a local currency exchange. You can just have your money conveniently changed and delivered right at your doorstep with just a few steps. The process takes just minutes and it is very fast and efficient no matter what your goals are.

Avoid Having No Currency

Can you imagine what will happen to you in a foreign country if you do not have enough currency with you? You might have to even skip a meal, until you find an expensive currency exchanger that will not give you your money’s worth. At the same time, you will be charged with service fees that XChange of America never charges you.

Can you imagine having to walk around or use cheaper means of transportation because you cannot pay cash for your cab? This can all be avoided if you would have your money exchanged ahead of time. Check currency exchange rate online at Xchange of America before your trip and get the currency that you need and this will not be an issue at all.

You can ask us any questions at all

With with XChange of America, you can ask any questions that you may have about our service because we are always more than willing to help you out.

Whether it’s a discussion about the currency exchange rate to various details on how we will be sending your money right at your doorstep, we will be helping you out every step of the way. With all of our advice that we can give about currency exchange rates and currency, you can expect that you will have the most currency possible for your trip.

When is the Best Time to Have Currency Exchanged?

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Traveling to another country can be a fun and stress free adventure when you plan everything out ahead of time. When it comes to planning the things that you need for your trip, it isn’t enough just to purchase your plane tickets, book your accommodations, and buy clothing or other items.

You also need to have the right amount of local currency which will allow you to buy food and other necessities that can only be paid for in cash when you’re traveling abroad. Looking at the currency exchange rate ahead of time will allow you to know exactly how much you need to spend in order to buy currency.

If you check the currency exchange rate ahead of time you’ll also have the chance to purchase it prior to traveling. Some of the requirements of your trip may have been paid through your credit card so you won’t need to worry about that anymore but for your pocket money it’s essential to have some cash.

Buying Foreign Currency Ahead of Time

It’s a good idea to check the currency exchange rate as soon as you can before your actual trip to determine when the right time to buy currency is. You may not think that this is necessary but when you do this, you will have the opportunity to purchase currency when the rates are good.

Xchange of America can help you determine the best time to buy

It can be a bit hard to check on foreign currency rates when you do not have enough time to focus on other things aside from your job and daily requirements. When you buy foreign currency from Xchange of America, you can rest assured that the staff members will be more than willing to help you determine when the best time to purchase it is.

Also, when you buy currency from Xchange of America, you can also receive the cash right at your own doorstep. Of course, you can also go to one of our local stores for currency exchange. The most important thing is you do not have to pay any service fees in the process. This the main difference from us and other currency exchange services.

Know How Much Money You Need

Just how much money do you actually need for your trip? If you are going to purchase food and transportation for the whole duration of your stay, how much do you think you will spend?

It’s a good idea to calculate it that first and wait for the best currency exchange rate at Xchange of America so you can only exchange what you need. If you want to exchange extra money, it’s a good idea to do this as well because you might see something that you can’t miss buying.

Get Accurate Advice from Xchange of America

You have to remember that when it comes to purchasing the right amount of money that you need for your trip, you may not be able to accomplish it on your own without guidance. It’s a good idea to ask for tips and recommendations regarding the currency exchange rate from Xchange of America. We are more than willing to give you the help that you need.

Inflation and the currency exchange rate

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Inflation is one of the biggest economic factors that influence the currency exchange rate, but there are several other factors that influence it as well. Inflation is thought to affect the currency exchange rate by depreciating the value of a country’s currency, while the value of currencies of countries that are in a period of deflation often increases. Deflation is not always a sign of economic strength, and inflation is not always a sign of a weakening economy, so it is not the only factor that affects the currency exchange rate. The currency exchange rate is also affected by purchasing power parity (PPP) which is the difference in prices from one country to another.

How PPP affects the currency exchange rate

PPP is the difference in prices for the same commodity, and the theory of PPP suggests that prices for one good will relatively be the same from one country to another. For instance, there is the Big Mac Index, which is a bit of a humorous anecdote, and is based on the PPP theory that the price for one Big Mac in one country should be around the same in a different country. A greater quantity of currency may be required to purchase a Big Mac for a country that has a high inflation rate, and likewise a country with a stronger currency and a lower inflation rate will normally require less of its currency to purchase one. This generally holds true for other goods, but other factors affect the price of a good such as the country of its production, transportation costs, and other logistics.

Inflation increases the amount of currency in circulation and negatively impacts the currency exchange rate

Another effect that inflation has on the economy is that it increases the amount of currency in circulation. Although some would argue that this in theory is a good thing, since more currency is available in the economy, the net result is often that the value of the currency becomes diminished because a higher quantity of currency is often created without the work necessary to create value. This occurs when the central bank of a country “prints” currency to put more of it into circulation; the result is that the inflation rate often increases while the value of the currency diminishes because the prices for goods and services almost always go up after inflation increases.

Price inflation and the currency exchange rate

Price inflation is tied to monetary inflation, and when inflation rates rise, prices will also often rise to compensate. Prices for goods and services essentially “absorb” the extra currency in circulation like a sponge. As a result, a country’s currency will often decline in value, both for its value when buying goods and services in the country itself, and for its value in buying other country’s currencies (the currency exchange rate). Inflation may also be a sign of economic distress, for example the stock market and mortgage security crisis of 2008 was followed by QE (quantitative easing) and the Federal Reserve bailout package, both of which involved printing more currency into circulation to prevent a massive economic crisis.

How to time your currency purchase based on the currency exchange rate

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The currency exchange rate has a major influence on how much money you are going to spend when you buy currency for investment purposes or for traveling. You can time your currency purchase so that you benefit from the currency exchange rate. There are definitely better times throughout the year to purchase currency because the currency exchange rate will fluctuate quite a bit throughout the year, depending on the type of currency that you are using. The U.S. dollar for instance will fluctuate in value compared to many other currencies. If you plan on making a trip in the future, and you have time to prepare for a currency purchase, you can time your purchase and spend less money.

Look for gains against the currency you are looking to buy

Assuming that the dollar is your main currency, you should monitor the currency exchange rate and time your currency purchase. As soon as the currency exchange rate starts to favor the dollar, you should buy the foreign currency that you are interested in purchasing. At Xchange of America we can help you figure out the right time to buy, and we can even notify you when a more favorable currency exchange rate is available. The currency exchange rate will fluctuate quite a bit, even on a daily basis, and if you have a lot of time before your trip you may have the opportunity to save quite a bit of money.

Be sure to buy currency before you travel

Don’t wait until right before your trip to buy currency; you can benefit from a favorable currency exchange rate if you plan your purchase ahead of time. You also will have to pay extra service fees if you buy currency at the airport or elsewhere, and the cost can be quite substantial. If you make a currency purchase ahead of time you can look for the best currency exchange rate and save quite a bit of money, and you will be able to avoid any last minute hassles. Check the daily currency exchange rates and as soon as you see a more favorable rate you should consider making a purchase.

Ask XChange of America for advice

Timing a currency purchase can definitely be complicated, as there are several factors that go into what influences a currency exchange rate. Because of how complicated it can be, it makes sense to ask an expert for help with your currency purchase, which allows you to save time and focus on preparing for your travels. The support staff at XChange of America can help you figure out the best time to make a purchase and help you make a decision regarding how much currency you will need depending on which country you are traveling to. You don’t have to spend time learning how currency exchange rates work; you can rely on the expert advice of the staff at XChange of America and you can save both time and money on your currency purchase.

Understand and Profit From the Currency Exchange Rate

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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.

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.

Xchange of America’s Tips on Saving Money during Holidays

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More people are anxiously planning their holidays as the summer season approaches. According to a representative of the moneychanger xchangeofamerica.com, there are plenty of ways to attain great value out of any vacation, of which the first one is to leverage the currency exchange rate.

Those who regularly exchange money for other currencies will notice how much they can gain in return. The U.S. dollar fairs even better against the currencies of many popular tourist destinations outside the Euro Zone. Northern Cyprus – which uses the Turkish lira – has steadily risen in popularity amongst seasoned American tourists thanks to its extreme affordability.

Second tip is to avoid planning breaks during school holidays, as the flood of students looking to enjoy trips to wherever they can go has the tendency to increase prices for flights, accommodations, restaurants, clubs and other commercial plus entertainment establishments located locally and abroad.

Third tip is to avoid booking at the last minute – although doing so would often mean being charged less in the past, today’s tourism industry has evolved to incorporate finely-tuned discount rates throughout the year.

Fourth tip on the list applies to those heading to European countries – although vacationists might not be able to take advantage of getting a highly favorable spending power considering how well Europe’s currency exchange rate stacks against most currencies across the globe, enjoying a comparatively cheaper holiday near the mountains is still possible.

Chalets and ski resorts – such as The Burgenland in Austria and Grindlewald in Switzerland — drop their accommodation rates as the summer sets in and business starts moving slowly. Moreover, guests staying at the mountains don’t have to worry about uncomfortably hot weather, as the extra altitude keeps the visitors cool throughout the entire day.

Fifth and last tip is to be wary of pricing gimmicks – while travel agencies may put headlines such as “kids ride free!” on their signboards, parents might be surprised that these establishments make up for their loss by jacking up prices for adult tickets.

Amongst all the tips listed here, a vacationist would benefit the most by prioritizing the first, as he or she could drastically increase his or her spending power by leveraging his local currency through the currency exchange rate of other countries.

Before making the move to exchange money at changers, it’s important to ensure that the establishment is legit, and offers fair rates for all customers.

Getting the Best Currency Exchange Rate on Holiday

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Sometimes bargains are not really good deals once you get to see the “other” fees that come with it. If one is not cautious enough in checking out these extra fees then you may actually be paying more than what you bargained for. Choosing the Holidays to take your vacations is a great way to spend quality time with your loved ones but there are ways to save more during these vacations;

Mobile Phones
Internet access over your phone while overseas can amount to a small fortune. You will be one of those customers who might be in shock once you receive your expensive bill. Before leaving call your provider and let them know that you are travelling and ask if they have some special offers. Or you could ask them to simply turn off data roaming so you won’t be tempted to use the data that’s included on your phone. Or if you’re the adventurous type who can survive without using your mobile then by all means keep it tucked away during your trip and use it sparingly.

Exchange rates
It is not advisable to exchange your currency at the airport because you’ll get charged with a lot of fees. Try to do it before you leave or look for a currency exchange bureau that would give you a good deal. There are a lot of websites that you can look up and you could even compare rates. Do your transactions online and just wait for your currencies to arrive at your doorstep.

Credit Card
If you use your credit card overseas you may get a charged with up to 3% of your purchase. So look for a card that doesn’t charge fees for your trips abroad. A prepaid currency card will be even better because it protects you from exchange rate fluctuations. It’s stapled on a fixed exchange rate so you are protected from the sudden highs and lows of the exchange rate market. Also avoid using your debit card because you get charged with higher fees every time you use them.