On the face of it, buying currency for your holidays can seem like a straightforward process. You simply go to your bank or the airport exchange counter, buy the currency you need, and get on to the business of going on holiday, right? Yes, that’s one approach, but you almost certainly will not get the best deal.
One of our independent currency suppliers, Airgo FX have come up with some great tips which we have passed on and you may find useful when it comes to exchanging your hard earned GBP into travel money.
To start with the top five things you need to know to secure the best currency exchange rate and avoid foreign money transfer scams.
Five Things You Need to Know about Buying Holiday Currency
The following five bits of knowledge will give you a great place to start in acquainting yourself with the currency exchange market:
- It’s always best to plan ahead. Your currency purchase is an investment like any other. Therefore, it’s imperative that you avoid making last-minute decisions when buying foreign currency for your holiday. With a little knowledge and diligence, you can give yourself the best chance of securing the best exchange rate.
- Although reliable institutions like your bank and the post office will work in a last-minute pinch, it’s still best to avoid them if at all possible because they charge significantly higher rates than speciality firms like AIRGOFX.
- Ordering currency online is much cheaper than last minute exchanges at the airport. This is one of many reasons to plan ahead.
- Prepaid credit cards are a safe and convenient way to make purchases and withdraw necessary funds from ATMs overseas, but they can still be subject to fluctuating exchange rates.
- When purchasing or using a prepaid travel card, make sure you understand what exchange rate you’re actually paying and if there are any additional hidden fees.
What sorts of things affect the exchange rate?
As you probably know, the currency market does not play out in a vacuum. Just like any other investment or purchase, it’s buffeted, sometimes violently, by a variety of complex factors. Obviously, a comprehensive discussion of these factors is well beyond the scope of this posting, but two of the most influential right now are the Brexit movement in the UK and the Trump phenomenon in the United States. Here’s an overview of the effects that the Brexit and Trumpism are currently having on the world currency exchange market.
The relationship between the Brexit and currency market has been complex, to say the least. The pound took a hard hit in the immediate aftermath of the Brexit vote before rebounding a bit a few weeks later. Then it declined sharply again and rose a bit, etc. No matter what the long term holds, the present situation seems clear. Whenever strong sentiment in favour of the Brexit is widespread, the pound seems to take a nosedive, especially when economic indicators in the Eurozone are strong.
Needless to say, the Trump presidency has sent chaotic ripples throughout the world’s currency markets. While the American economy has been in reasonably good shape since Mr. Trump gained the presidency, his erratic leadership has had wildly vacillating effects on the dollar’s performance against other currencies. Pay attention to what Mr. Trump is saying and doing on a week to week basis and watch the effect on the exchange rate. The exchange rate might be more favourable for the American dollar in the immediate aftermath of one of Trump’s isolationist or trade-war tirades and vice-versa. These things really do have an effect.
Of course the best way to get a good deal is always to compare the rates on offer. Airgo FX who kindly provided us with these tips always have competitive exchange rates for buying and selling.
For more detailed information and currency exchange rate history, visit any of our dedicated currency pages.