How do you find out TRUE EXCHANGE RATE?
 

Hi,
I understand the Euro is stronger then the US dollar right now.

We've been reading in the newspaper that the Euro is 1.12 but the banks tell you 1.18. One bank told me not to look at the rate in the newspaper because that was dealing stricktly in millions from bank to bank. If that's the case, then where do we go to find out the rate?

1.12 to 1.18 is a big difference. I went to the bank to order some Euro just for immediate use. I gave then $200 and got $170 euro. That stinks !! Plus, the bank charged me $10 for the service. I know there is nothing we can do with the US dollar being weak, and the exchange rate is what it is, we'd just like to know where to look to find the actual rate. Thanks

http://www.xe.net/currency/subscrib.htm

Sign up here and you'll receive the exchange rates via daily e-mail. You'll receive about 99% of those rates at your foreign destination for credit card transactions (assuming you are using credit cards WITHOUT "currency transaction fees") and ATM withdrawals.

When obtaining foreign currency from a local bank, the "actual rate" is whatever that bank is charging you.

I like to use www.oanda.com or the newspaper. That is the international bank rate, but that's the base for comparison. You can't get rates the same as banks trading in millions, of course. But all other rates are based on that, so that is the true rate in one sense. There is no one rate everybody charges. Actually, I don't think a little over 5 pct markup on interbank rate is that terrible, but a lot of banks add on service charges.

The US dollar isn't that weak, that isn't a historically extremely unusual rate -- it's been a lot worse in the past at various times.

If it bothers you so much, why did you buy euros at your US bank, anyway. You could have gotten them in Europe, although actually you'd probably pay about a 10 pct markup at an airport exchange bureau.

The closest thing to the "official" interbank exchange rate that you can get will likely come with your ATM card and charges to your credit card. To avoid the problem of trying to get Euros before departure or immediately upon arrival, I keep some to "seed" the next trip. If you travel to Europe annually or more, it saves hassles.

cemcem: You seem to be irrationally obsessed with the fact that the dollar is weak in comparison to the euro right now, and how that might affect your trip.
As an overall observation, I would say that the exchange rate is always changing, and if you're traveling to another country you simply have to deal with the fact that things might become more or less expensive on a day-to-day basis between the time you plan the trip and the time you take it. Lucky for you that the change isn't exactly HUGE.
Also, what do you mean "I gave them $200 and got 170 euro - that stinks!" You don't seem to understand the very basics of foreign exchange. Were you expecting exactly 200 euros in return?
The "actual rate" changes all time time. Some days when I call my bank to pay bills in France I get a great rate of exchange, and some days it's awful. It's a constantly changing equation.

I would suggest that you get a handle on your ability to understand how the US dollar relates to other currencies, particularly the euro, before you take off on this trip. Otherwise, you are going to drive yourself crazy.

cemcem: not that it is much help to you now - but for others thinking of getting foreign currency ahead of time . . . .

You actually paid $210 to get 170 euro (including the bank charge). That is nearly $1.24 per euro. That 12? difference adds up fast if you are getting a lot of euro.

As we say over and over, you will get a better exchange rate using ATMs after you get to Europe.

That ? was a cent sign when I typed - Fodor's software is REALLY frustrating sometimes . . . . .

All exchangers have a spread between their buying and selling prices for different currencies. Most will also charge a commission/transaction charge. There's no more of a 'true' exchange rate than there's a 'true' price for a washing machine or a sandwich.

You could spend a lot of time trying to work out the balance of advantage/ disadvantage of different rates/commissions, but is any saving thereby worth the opportunity cost of whatever fun thing you might have done with the time?

My working assumption is that you probably get a better deal using credit cards where you can rather than exchanged cash, and bank ATMs abroad are better than specialist exchange agencies for getting cash, but that you need to check with your own bank what charges they put on each transaction - it may well be that proportionately (on smaller transactions) these have more impact than variations in the bank's declared exchange rate.

Thank you for all your input.

I wouldn't really say that I'm obsessing over the exchange rate. Don't misunderstand me, me and my husband certainly understand that the rate changes daily. We are not wealthy people and we work very hard for our money, so when you plan and budget for a 7,000 trip , it's a little uneasy realizing that we will be spending 1,260 more just because of the exchange rate.

Are we still going?? YES !! Will we forget about it all when we are there?? YES !! When we get home and we see our cc bills etc. and see the added charges will it bum us out for a little bit?? YES !! But we will have all our wonderful memories and that's what matters.

You are still not understanding exchange rates, cemcem. Do you believe that if you were travelling to the UK you would be spending $4000 more because the exchange rate is around 1.6? Or that if you were traveling to Canada you would be spending $1190 less because the exchange rate is .73?

You have to compare prices to know whether you are paying more or less.

Here are some websites you can use to convert from one currency to another. (Some of these may already be listed in a previous post.)

http://www.oanda.com/

http://finance.yahoo.com/m5?s=USD

http://www.est-direct.com/tools/currency/index.php

http://www.est-direct.com/tools/curr...ex_lang_en.php


http://www.xe.com/ucc/

At an exchange rate of $1.12 per Euro, your $7000 would get you 6250 Euros.

At $1.18 per Euro, you would be paying 6 cents more per Euro for those 6250 Euros. That's $375 more. Thats about 5.37% more.

Call you cc company and find out what their charges are. Some don't charge for foreign currency exchange and you get a very good rate. I would expect that my ATM/Visa Check card would get closer to the $1.12 rate than the $1.18 rate and has no other charges.

There is no True Exchange Rate. When you go out and buy some Euros, someone had to buy them inorder to sell them to you. Now they are not going to perform that service for nothing, so they may buy them for $1.14 and sell them to you for $1.22. So what you are looking for is who will sell them at the lowest markup.