Posted by forex at 5:49 AM
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1. Research several exchange rates offered by banks or online currency conversion resources that show the market rate of one unit of a foreign currency against one unit of U.S. currency. Contact your own bank, either by telephone or online, to check current exchange rates. Online currency converters are widely available, letting you shop around for the best conversion rate.
2. Use those figures to calculate the amount of currency you will receive in a foreign exchange transaction. For example, to determine how many British pounds you would receive for $100 on a particular day, multiply the sterling rate--0.64 pound as given by the XE currency converter as of Dec. 17, 2010--by 100. This gives you 64 G.B. pounds for $100. To reverse the process, and to calculate how many U.S. dollars you would receive for 100 British pounds, multiply the dollar rate--$1.55 using the same source and date--by 100. This gives you $155 for 100 pounds.
3. Factor in the cost of any commission or fee you will pay for the transaction if you intend to travel. Your bank might not charge anything if you make the exchange in your own country, but charges are likely if you withdraw money from a bank or ATM abroad.Hotels and airports at home and abroad are likely to charge a transaction fee, and their exchange rates are not as favorable as those at a bank.
4. Exchange your currency on a day when the exchange rate is favorable for you to receive a larger amount of the currency you intend to buy. For small amounts of money this might not amount to much of a saving, and there can be little point in waiting several days for a shift of a fraction of a percentage. But it can make a significant difference if you are changing a large amount of money.