Foreign exchange rates differ from country to country. That is why today I will be focusing on the United States Dollar and the resources I've discovered in order to be sure you're not missing out on a good exchange rate. I've discovered resources which let you know what's the buying rate of the bank and at how much you can buy from them.
Research is key to good foreign exchange rates when you exchange money!
Ok, so let's start with this great example of the weekly US Dollar index as given by the Federal Reserve bank of America. This is a great resource to learn from as I believe it states the formal position of the US on its exchange rates towards its banks and other countries.
Only problem is - This index only gives you the past week's USD foreign exchange rates stats. So if you are looking to exchange currencies today it is kind of useless. However, it does give you the basic reference line to see how much local banks are charging over this price and on which price they are basing their commission.
How to find the best foreign exchange rates for the USD?
The answer to that question is a bit old fashioned - Call your local banks and compare. I know, a little over the counter type of an answer, but it's true. It is almost a certainty that if you need to exchange the US Dollar into cash of another currency then local banks are probably your best choice.
The only thing left to do now is to compare between the leading banks in your area. Call as many as 5 local leading bank branches in your city and write down their exchange rate and commission rate. You'd be surprised at the changes but keep in mind that exchange rates aren't supposed to change dramatically while commission rates can prove to vary significantly.
If you are changing a lot of Dollars into another currency then check the local currency exchange vendors as well.
- But the least obvious answer is also usually the best one - Withdraw cash by using your ATM or Debit card when you get to where you are traveling. This is probably the best foreign exchange rates offer you will get (with the lowest commissions and best exchange rate).
- Do not use your credit card to withdraw cash at a foreign ATM. Then charges are huge!
Is the online foreign exchange rates converter good for the USD?
If you are thinking about using a foreign exchange rates converter on the USD to determine its rate you should know this: currency converters are only a program that calculates exchange rates according to a multitude of parameters. While some of these currency converters are reliable and good (like this one from Bloomberg, or this one from Yahoo Finance), they only show the current rate and are in no way any kind of proposal to purchase or sell.
In fact, most banks change their exchange rate many times during the day, just like the calculators, so any information received from them is not 100% accurate.
In conclusion, the best US Dollar foreign exchange rates are found domestically in the United States or at "domestic" US bank branches' ATM's at the country you are visiting (for cash withdrawals only with debit or ATM cards - not credit cards!).
