Currency Exchange?
Jan 27th, 2004, 07:53 AM
#1
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Currency Exchange?
I have a friend who lives in the States. His family has left him quite a nice sum in an inheritance. The money is sitting in Spain. He's offered to take me with him in the next few days to get the money if I can figure this thing out for him.
I need any currency traders out there to help me with the following dilemna.
I have been told by others that it advantageous to exchange the Euros for Canadian dollars and then exchange the Canadian dollars for US Dollars.
Does anyone out there understand it enough to explain to me how something like that works.
Or, is it even better to exchange the Euros for Australian dollars?
Thanks
I need any currency traders out there to help me with the following dilemna.
I have been told by others that it advantageous to exchange the Euros for Canadian dollars and then exchange the Canadian dollars for US Dollars.
Does anyone out there understand it enough to explain to me how something like that works.
Or, is it even better to exchange the Euros for Australian dollars?
Thanks
Jan 27th, 2004, 07:58 AM
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why exchange anything....either take a check from spain to your home bank or better still go to the spanish bank and have them wire the money to your home bank...there will be fees involved. don't carry cash or convert anything.....
Jan 27th, 2004, 08:01 AM
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Jan 27th, 2004, 08:22 AM
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If you were planning to bring a large amount of cash into Canada, of any currency, you would attract the intense interest of the folks that enforce the <Proceeds of Crime (Money Laundering) and Terrorist Financing Act>. I suspect the US has similar legislation.
Jan 27th, 2004, 08:35 AM
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I think your sources of information need to be asked to show you with actual calculations how a double exchange would help your friend earn more money.
Go to the exchange rate tables and multiply it for yourselves and see if you come out ahead.
Just remember that money is like any other commodity that is bought and sold.
You must use an agent who has the connections, and they always charge a fee. The fees are negotiable.
Having been a graduate student in international trade, I don't for the life of me see how a double exchange could profit anybody except the money exchangers.
Right now the wholesale rate of exchange is $1.65 C for 1€, and $1.264 US for 1€. The exchange rate for Canadian dollars to US dollars is
$1.305 C for $1. US.
If you start with 1,000€ and convert it to Canadian, you should receive about
$1,650C. Convert that to US dollars and you get $1264.37.
Go straight from euro to US dollars and you get $1264, using the figures I just saw on Yahoo. Where is the profit you gain by the double exchange?
In reality, you will pay fees to do both exchanges.
Without knowing where the money is and what form it is in right now, it is impossible to describe the next step.
If it is in a Spanish bank account, some detailed negotiation will need to ensue to agree on a fee for the conversion. You can bet your first euro that the bank will get very greedy.
If you go from one currency base to another, there are going to be fees.
And you will be converting, regardless of what labels others want to apply to it.
Frankly this is one of those things that sounds like a first class scam.
I hate to sound like a doubting Thomas, but none of it makes sense.
Go to the exchange rate tables and multiply it for yourselves and see if you come out ahead.
Just remember that money is like any other commodity that is bought and sold.
You must use an agent who has the connections, and they always charge a fee. The fees are negotiable.
Having been a graduate student in international trade, I don't for the life of me see how a double exchange could profit anybody except the money exchangers.
Right now the wholesale rate of exchange is $1.65 C for 1€, and $1.264 US for 1€. The exchange rate for Canadian dollars to US dollars is
$1.305 C for $1. US.
If you start with 1,000€ and convert it to Canadian, you should receive about
$1,650C. Convert that to US dollars and you get $1264.37.
Go straight from euro to US dollars and you get $1264, using the figures I just saw on Yahoo. Where is the profit you gain by the double exchange?
In reality, you will pay fees to do both exchanges.
Without knowing where the money is and what form it is in right now, it is impossible to describe the next step.
If it is in a Spanish bank account, some detailed negotiation will need to ensue to agree on a fee for the conversion. You can bet your first euro that the bank will get very greedy.
If you go from one currency base to another, there are going to be fees.
And you will be converting, regardless of what labels others want to apply to it.
Frankly this is one of those things that sounds like a first class scam.
I hate to sound like a doubting Thomas, but none of it makes sense.
Jan 27th, 2004, 08:38 AM
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First off, if it is a significant sum, he should talk to an estate planner or a tax accountant before he does anything with the money. He may want to take it in stages over time or some other method to reduce tax liability if any.
If he decides to bring the money to the US, perhaps I am missing something, but why wouldn't your friend want to use Euros to purchase Dollars, now that the exchange rate is so advantageous for Euro holders? In other words, he will be able to get MORE Dollars with his Euros than he would have a year ago, and perhaps more than he would get if he waited a year to do the exchange. Going through other currencies which are not as weak as the Dollar are not what he wants to do. From my calculation, even without wire transfer and other bank costs, he will lose if he tries to first convert to Canadian Dollars of Australian Dollars. I think the way to get the most Dollars is to go straight from Euros to Dollars.
I agree that your friends should not carry this around in cash nor bring it into the US in a suitcase. Unless he needs to go to Spain to get the funds released because of inheritance law requirements, he should instruct the bank in Spain to wire Euros to his US Dollar bank account in the US. The bank will do the conversion, and if it really is a large amount (say more than 100,000 Dollars or Euros) he will get a very good rate, almost a wholesale rate. There will probably be a waiting period before he can access the funds while the banks comply with the US Patriot Act (and/or similar acts in Spain.) I live in Europe and transfer funds regularly and found that there is a bit of a delay but never a problem. Bringing it a suitcase of cash without a known origin could be a HUGE problem, and is a good way to get to know the people at US Customs very well. Note that he has has to declare on its customs form if he is bringing in more than US$10,000 in cahs or other instruments (i.e., cashier's check).
The other option your friend has is to keep the Euros and open a money market and/or brokerage account and invest in European markets. He could also buy property in Europe. Given the weak Dollar, it is always nice to have a hedge like savings or investment in aonther currency.
If he decides to bring the money to the US, perhaps I am missing something, but why wouldn't your friend want to use Euros to purchase Dollars, now that the exchange rate is so advantageous for Euro holders? In other words, he will be able to get MORE Dollars with his Euros than he would have a year ago, and perhaps more than he would get if he waited a year to do the exchange. Going through other currencies which are not as weak as the Dollar are not what he wants to do. From my calculation, even without wire transfer and other bank costs, he will lose if he tries to first convert to Canadian Dollars of Australian Dollars. I think the way to get the most Dollars is to go straight from Euros to Dollars.
I agree that your friends should not carry this around in cash nor bring it into the US in a suitcase. Unless he needs to go to Spain to get the funds released because of inheritance law requirements, he should instruct the bank in Spain to wire Euros to his US Dollar bank account in the US. The bank will do the conversion, and if it really is a large amount (say more than 100,000 Dollars or Euros) he will get a very good rate, almost a wholesale rate. There will probably be a waiting period before he can access the funds while the banks comply with the US Patriot Act (and/or similar acts in Spain.) I live in Europe and transfer funds regularly and found that there is a bit of a delay but never a problem. Bringing it a suitcase of cash without a known origin could be a HUGE problem, and is a good way to get to know the people at US Customs very well. Note that he has has to declare on its customs form if he is bringing in more than US$10,000 in cahs or other instruments (i.e., cashier's check).
The other option your friend has is to keep the Euros and open a money market and/or brokerage account and invest in European markets. He could also buy property in Europe. Given the weak Dollar, it is always nice to have a hedge like savings or investment in aonther currency.
