Malya

I apologize in advance for this message, but I am horrible in math. I always have difficulty figuring out the exchange rates. I'm currently in Switzerland, but often need euros as the French border is so close. Someone suggested that instead of exchanging dollars to euros which is currently 1 euro = $1.40 that it could be better for me to first exchange to swiss francs 1 SF = $1.08 than to euros? Could this be beneficial to me? I think 1SF = 1.29 euros. If I'm figuring it out right, it's would be about the same exchange rate even if I were to exchange dollars directly to euros.

Merci,
Malya

adrienne

It works out the same no matter how you convert but are you sure about the exchange rate.

The rate you're using - 1CHF = $1.09 is the inter-bank rate that you get from currency conversion charts. A private person does not get this rate. A currency exchange will certainly not give you the inter-bank rate so you need to check how much the conversion is where you exchange money. Sometimes there is a conversion fee in addition to the poor exchange rate. And if you're converting currency twice at a poor exchange rate then you're really losing money.

Which leads to the question...why are you exchanging money rather than using ATM machines for cash.

Come back and tell us what the accurate conversion rates are from your local exchange. I'm sure they're not as good as using an ATM machine.

ira

Hi M,

Once upon a time, when there weren't many computers, it was possible for an arbitrager to buy one currency trade it for another currency and then buy the first currency and make a profit.

Today, with computers checking the price of everything every second all you will do is lose the additional conversion fee.

I suggest that instead of converting $ to E that you get your E in FR from an ATM.

Christina

This doesn't make any sense unless wherever you exchange consistently marks up one foreign currency's exchange rate more than another. Most places make some profit on anything they exchange, why else would they do it, they aren't charities. So changing twice would almost always (in theory) lose you money, of course. Now if they were really marking up the rate from USD to euro more than CHF to euro, it could be true that it would help.

If you are only paying $1.40 for a euro, that seems hard to believe as today's exchange rate is $1.41. But a Swiss franc should cost $1.10. In general, it sounds like you mean to be quoting the interbank rates and are just a little behind. If you seriously can find a place that has zero markup and exchanges everything at interbank, it makes no difference, obviously, so why go to the trouble.

Malya

Thanks Adrienne and Ira. I apologize for not being clear. Yes, I am getting my money from an ATM, I just wasn't sure if I could save a few dollars by then converting the Swiss Francs to euros. Thanks for the explanation on the inter-bank rate, that explains why the exchange rate was not quite the same as posted on the Wall Street Journal, etc.

StCirq

No whoever the someone is who suggested that is wrong.

Without needing to go into any particulars at all, just keep in mind that every time you effect a currency exchange you lose money. So it make no sense to convert dollars to francs and then francs to euros.

nytraveler

You shouldn't be changing anything to anything. Just pull whatever cash you need from a local ATM.