The RBA has made a lot of noise about the economic benefits of a lower Australian dollar recently and most businesses involved in the local tourism sector, and exporters in general, agree a lower currency would help them remain competitive.

Some manufacturers might beg to differ however. In theory a lower Aussie dollar can help make locally-manufactured goods more competitively priced compared to imported goods. In reality, things aren’t so simple.

A 10 per cent drop in the Aussie dollar will, eventually, make imported goods more expensive. Crucially though, this will not necessarily translate to a 10 per cent increase in business for the manufacturer. What it can do is actually increase costs by 10 per cent without a noticeable rise on the other side of the ledger.

Some OzForex clients are expressing a preference for a higher Aussie dollar given they import many raw materials that go into the manufacturing process.
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Excited to announce that the BestExchangeRates team and friends (pictured below) will be converging from Australia and the UK to Japan for a field study trip to research all matters Yen AUD/JPY GBP/JPYand oh a few powder runs and Onsen along the way :)

BER Research team taking an onsen
BER research team checking an Onsen’s water temperature

Along the way we will compare using Cash, Bank Credit Cards and Prepaid Multi-currency Travel Cards from Travelex OzForex and QantasCash. Also to be investigated is whether Japan really is a cash only/preferred economy, and the strange and wonderfully inexplicable workings of Japanese ATMs and Toilet Flush mechanisms.
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We first heard rumblings of discontent from leaders of emerging market economies around the middle of last year when it looked as though the US was about to commence tapering quantitative easing. These rumblings are likely to get a whole lot louder this time around though, as the impact of US policy starts to bite these economies hard.

The possibility of a Global Emerging Currency (GEC) crisis has grown over the last week with emerging market currencies around the globe such as the Argentine Peso (-5%), South African Rand (-3.6%) and the Indian Rupee (-2.2%) sold heavily in the last week alone. If it continues, as I think it may, then undoubtedly the Australian economy and the Aussie dollar will also be affected.

What’s different this time around?

What strikes me about the recent price action is that unlike previous emerging currency crises, think Latin America in the ‘80s or Asian Currencies during the late ‘90s, the selling does not appear to be geographically specific. This is not just an issue for South America or some parts of Asia, as we have also seen currencies in Europe like the Russian Rouble (-2.6%) and Turkish Lira (-4%) weaken.

This time around the catalyst is coming from one global external source and as such it has the ability to reach all four corners of the globe.
It’s not all down to US QE tapering though. There are some country specific economic factors (e.g. widening deficits or political uncertainty) contributing to the performance of each economy but the markets seem to be driven more by fear at the moment.
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We came across an article in The Australian Financial Review today on OzForex with an interesting experiment of splitting a $200K AUD->USD transfer into two, with half sent via OzForex and the other half by one of the ‘big four’ Australian banks on the same day to compare what arrives at the other end.

The results are illuminating….!


If you have ever converted currencies or transferred money overseas, you may have been shocked to discover how much you were charged by your friendly bank to move your money.

Recently, a friend was preparing to transfer $200K overseas. I asked him if he would split the transaction into two lots, in order to try OzForex.

After signing up to their online platform, he transferred $100K through one of Australia’s big four banks and the other $100K through OzForex.
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All Vendor currency exchange rates on BestExchangeRates are compared to what we call the Mid-Market Rate for each currency pair.

This mid-market rate (sometimes also called the interbank rate or spot rate) is used in global financial markets and what you normally see reported on the news.

It is called the “mid-rate” because it is always half-way between latest BUY and SELL rates for the currency pair.

Generally they say when investing you should buy low and sell high and that is exactly what the banks are doing with you, they buy currency from you at low rates and sell currency back to you at high rates, so unfortunately you end up buying high and selling low!

That is why most banks and brokers hide this mid-rate from you by marking it up significantly – to their own benefit.
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Peer-to-Peer is a recent innovation for international money transfers. The playing field is being levelled with retail customers benefiting from great rates that were previously only available to big companies. At the forefront of this innovation are ‘peer to peer’ money transfers.

Online peer to peer (P2P) first began in the early nineties, with file-sharing services like Napster, Bearshare and KaZaA. Since then, P2P developed into numerous other, more legal, uses. Skype, for example, uses a hybrid of P2P and client-server systems. P2P lending is increasingly common with sites like Lending Club and Prosper.com connecting individuals seeking funds with others able to lend money in return for interest. Even sites like Ebay and home rental service AirBnB come under the umbrella of P2P ‘collaborative consumption’.

Now peer to peer has come to the financial services industry too. Sites such as CurrencyFair.com put the power in the public’s hands, allowing you to get a great exchange rate with a safe and secure money marketplace.

P2P currency exchange and money transfer providers such as CurrencyFair bring together a network of users, each looking to exchange money for another currency. By matching you with another user selling the currency you want to buy, the P2P provider is able to offer an exceptional rate, and unlike banks and brokers, the rates are NOT dependant on how much you exchange. Every customer gets equal access to the same fair rates. Gone are the large middleman fees charged by banks and brokers.

The P2P provider, as a regulated entity, also provides security and convenience. They ensure that you can exchange safely, and that your money gets where it needs to go efficiently and quickly.

Is peer-to-peer the future of international money transfers? Only time will tell.

Many people who have traveled abroad have felt the temptation to purchase property overseas. For example, UK residents often consider buying overseas property in nearby European countries like France or Spain, Australian expats are buying property in Asia and Americans in Europe and Mexico.

Sometimes the price of foreign real estate can seem very attractive due to the foreign exchange rate favouring the prospective buyers’ currency. Tourists can also become enamoured with a delightful travel destination, perhaps leading to an interest in buying overseas property as a way to spend more time there. Still others might be interested in investing in undervalued overseas property based on the view that it will appreciate substantially over time.

Whatever your motivation for buying overseas property, the following top five tips can help assure that you have a more positive experience in doing so.

Tip #1: Investigate the Market Thoroughly

Although global property price trends do occur, real estate markets in different locales can go through cycles of rising and then correcting lower, which can be independent of each other.

In other words, just because property values are rising in your neighborhood  does not mean that they are also rising abroad. Such trends are especially important for investors who will typically want to buy near the bottom and sell near the top of a cycle.
Furthermore, some countries prevent or limit real estate ownership by foreigners, so you will want to make sure that you have the legal right to purchase real estate in that country and under what conditions you can do so before handing over any money in order to avoid scams or disappointment.

Basically, it really makes sense to do your homework about the real estate market in the country you are considering making a purchase in before putting up your money.

Tip #2: Obtain Professional Purchase Assistance
Great deals can certainly be had when buying foreign real estate directly from owners. Nevertheless, if you are unfamiliar with the foreign real estate market, then purchasing through a professional real estate agent or from a reputable property developer can provide useful guidance that can help you avoid many pitfalls when buying overseas property.
Such professionals typically have an obligation to see that you are properly informed about the details of the purchase. They will also usually make an effort to complete the deal and assure your satisfaction with it.

Tip #3: Hire a Legal Representative
Although real estate deals in your country of residence generally do not require the services of a lawyer, having an independent professional attorney representing your interests and watching out for potential legal problems can be invaluable when buying overseas property.

Aix-en-Provence, France.

Tip #4: Have Key Documents Translated

Before signing any documents relating to a potential real estate transaction, make sure that you have them professionally translated if they are written in a foreign language that you are not entirely comfortable reading. In general, you need to know exactly what you and the seller are agreeing to in words that you can clearly understand.

Tip #5: Saving Money on Mortgage Payments
Once you have read, understood and agreed to the terms of an overseas property purchase, you will then need to make arrangements to pay for it.

When transferring funds denominated in your domestic currency to either make a payment in full, a down payment, or a series of smaller mortgage payments, you will probably want to find a better foreign exchange solution than simply visiting your high street bank.

Such local banks typically provide poor forex services, which often involve very wide dealing spreads and limited transaction sizes. Fortunately, you can usually do much better by changing your money through a regular payments service, such as that offered by OzForex.

To speak to one of the accredited OzForex dealers about your foreign exchange requirements call 0845 686 1950 in the UK; 1300 300 424 in Australia; 1800 680 0750 in Canada or 0800 161 868 in NZ) or go to https://www.ozforex.com.au to register on line with 3 easy steps.

Registering with OzForex is FREE and you can view their live dealing rates immediately. Remember to mention you are a client of BestExchangeRates you will receive your first two transactions fee FREE!

The Australian dollar has hit new record highs in recent months rising to a 28 year high against the pound sterling (GBP) and also against the Japanese yen (JPY). Despite speculation that the recent RBA interest rate drops would substantially impact its valuation, the strong Aussie dollar looks like it’s here to stay awhile. Australians can take advantage of favourable currency exchange rates by looking overseas for some great buys.

Travelling overseas
Have you always dreamed of wandering through the beautiful cities of Europe or catching a glimpse of the bright lights and movie stars in the US? Perhaps combining skiing, culture and sushi in the normally expensive Japan is also within reach. Now is the perfect time to head overseas and do some international travelling. With airlines competing hard to offer the best fares, Australians will find their dollar going much further at popular destinations like the States. There’s no better time than now to plan your trip as experts recommend travelling sooner rather than later.

Meanwhile, if you have a trip planned in the next 6 months or so, it could be worth stocking up and purchasing a portion of the foreign currency now on a Prepaid Foreign Currency Travel Card rather than waiting until you arrive.

Buying online from overseas
The internet has made it easy to make purchases from overseas in foreign currency. While Australia lags behind other countries when it comes to online buying, experts are predicting that the recent strength of the Aussie dollar will have online expenditure figures soaring in 2013.

Books, CDs, electronics, gifts and clothing are just some of the goods that Australians are snapping up from international stores and having shipped to their door. Technology items such as computers, laptops and cameras are popular buys for their higher price points and the fact that they don’t incur an import tax, unlike cars. Remember, that if you are shopping from overseas to check for any additional charges for international buyers and that the seller does indeed ship to Australia.

Smart investment and business
Investors should take a good look at where their investment dollars are tied up and the impact the currency rates could have on business returns. As is the case with most money matters, a strong dollar can have both positive and negative effects depending on the vertical and the nature of a business’s operations. Overall, it’s a good time to consider foreign investments while some Australian companies may be able to take advantage of the strong dollar by sourcing cheaper resources and suppliers from overseas. However, other local businesses, especially exporters, may suffer as a result of higher price points that make them less competitive in the international marketplace.

When it comes to getting more bang for your buck, it’s about knowing where to spend your money to extract the most value. Money experts are expecting the Australian dollar to remain strong for the coming months so it’ll be smart to take advantage of these great exchange rates soon.

No matter what your transfer reasons are the strong Australian Dollar means you end up with more in your pocket.

To speak to one of our accredited OzForex dealers about your foreign exchange requirements call 1300 300 424 in Australia (0845 686 1950 in the UK; 1800 680 0750 in Canada or 0800 161 868 in NZ) or register online.

Registering with OzForex is FREE and you can view their live dealing rates immediately. Remember to mention you are a client of bextexchangerates.com.au you will receive your first two transactions fee FREE.

Ozforex

There are a number of cost components to making and receiving international payments, most of which are far from transparent to customers:

Currency fees

Currency conversion rates : Banks charge huge margins for currency conversion to the majority of businesses and individuals. They tend to fix rates once a day and therefore need to incorporate enough margin to protect against intraday rate volatility.

In addition, the level of price discrimination is extortionate – they get away with it because they can; businesses and consumers have been kept apathetic to using better alternatives.

Correspondent bank fees : These relate to the network of banking relationships that are utilised to complete an international transfer. Each correspondent bank skims a fee of the transferred amount for simply acting as link in the payment chain.

Customers are rarely made aware in advance as to how many correspondent banks are in the chain and what they will charge.
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By Carly Pickering, OzForex

The high Australian dollar means there’s rarely been a better time to travel.

Not only are airfares, accommodation and transport more affordable, but your increased shopping power will net you all types of bargains.

But while it’s true that the Australian dollar is up for most destinations, there are a few that really stand out.

In order, here are the best places to holiday if you want your dollar to work the hardest:

1. Europe

Three years ago in April 2009, $1 Australian would buy you 0.55 Euro.

Today, it’ll buy you 0.79 Euro – an increase of more than 43%

From Paris to Berlin, that’s a massive jump in your spending power. Travellers can thank a lack of confidence in the Euro as a result of problems in Greece, Spain, Portugal and other European countries for the bump.
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The BestExchangeRates platform is unique in providing a platform for currency vendors to publish rates into the retail marketplace.

It is an effective method for Banks and currency exchange vendors to promote their currency exchange rates and services.

We do this by providing the following services to Vendors who want to take advantage of the BestExchangeRates platform :

Vendor Accounts – Margins/Fees/MIN/MAX Pricing Rules

By registering for a Vendor Account you can submit your rate margins and fee structure by currency pair & deal amount as Pricing Rules using the following interface :



The margins are then applied to the latest market mid-rate and displayed in order of closest to the mid-rate along those of other vendors.

You provide your a Link for referral customers to click on and be brought to the desired destination on your website.


Website FX rate automatic import

If your rates are already publicly available on your website we can arrange for your rates to be incorporated into our fx rate comparison algorithm. This is an automated process if your rates are available on the web in a suitable format (a publicly accessible html <table> without login).

Advertising

BestExchangeRates can provide a source of well qualified traffic for your Forex related site. Our customers tend to be people looking to transfer money and have an immediate need to find a vendor that can provide them with good rates and a reliable service.

Note there are various monthly fees for the above Vendor services – please Contact Us for any information on any of the above.

Travelling with Credit Cards can be expensive!

Wondering what those extra “Fees” are on your credit card statement for purchases in Foreign currencies? Most banks and financial institutions charge these sneaky fees for transactions in a foreign currency (as much as 3% of the amount), only a few do not charge a fee for this so its worth knowing what your card is costing you.
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Interesting article from FT.com on why Retail FX spread trading is a racket…its all in the volatility and ability to bear it.

FT.com (Jul 13 2012)

Long established as the global hub for wholesale currency trading, Britain is now also the centre of the retail FX margin trading business. And there’s a reason for this: in many key aspects, FX trading is largely unregulated.

In the US back in 2010 the Commodity Futures Trading Commission imposed a 50-1 leverage cap after seeing retail customers being offered deals of up to 200 times their initial margin downpayment, yet in the UK today it is common to see broker customers being offered up to 500-1.

You might ask, what’s wrong with that? Speculators should be free to speculate. Except that this is a racket where the higher the leverage ratio, the greater the certainty the client will lose and the firm will profit. Whether it happens instantly or less quickly, the business is structured so that the customer almost always comes out worst.

Here’s how it works. Continue reading


June 2-3, 2012 by John Collett

TRAVELLERS always need to have some foreign cash on them as a back-up just in case they are unable to use their credit card or withdraw cash from an ATM.

A check with the foreign-exchange comparison website bestexchangerates.net shows a big variation in the exchange rates available when buying cash. The website calculates what it calls the “international mid rate”.

It shows the rates on offer from seven providers, including most of the big banks, and how much in percentage terms the buyer of the foreign currency would receive below the mid rate.

For example, early this week, the best rate for US Dollars was about 3 per cent below the mid rate and the worst rate about 5 per cent below the mid rate.

While there will be fees when buying travel money, it is also important to check the actual exchange rates being quoted.

smh.com.au

When planning an overseas trip figuring out how to access your money while away is complicated and probably left to the last minute.

You then end up paying high fees for changing foreign cash or with unexpected fees on your credit card for making purchases or withdrawals overseas.

With a bit or planning one way to reduce these fees is to use a prepaid Travel money card.

Prepaid Travel money cards

Also known as cash passports, these cards allow you load money onto them before your trip or while you are away via phone or over the internet. You can use them to make purchases and foreign cash withdrawals from ATMs. They are safer than taking actual cash as they also have credit card-like security with pin number access.

Another advantage is you can also choose the best time to purchase foreign currencies before your trip if you’re worried the currency rate might drop. The idea is to load up with the currencies you will be using on your trip, the load card exchange rates are generally better than changing actual cash and the ATM withdrawal fees are only a few dollars.

The disadvantage of travel money cards is the various fees and also what to do with left-over money on the card at the end of your trip. An option here is to load only what you think you will need for your trip and too top it up while you are away over the internet, or leave the money on the card for the next trip or any internet purchases made in the foreign currency.

You can compare prepaid travel card vendors currency rates and fees using our Prepaid Travel Card Calculator

How does the gyrations of the Aussie Dollar affect Shoppers, Travellers, Importers, Exporters, Manufacturers, Tourism operators, Educators?

Strong Australian dollar (above 0.90 USD):

Winners

Shoppers: Imports like electronics and cars should be cheaper in coming months if retailers pass on savings from new stock. Buying online from places like the US and UK will also become cheaper for consumers.

Travellers: Overseas holidays will be less expensive, with more buying power for everything from hotels to shopping. Airlines pay for fuel in US dollars so in theory fares should also be cheaper. Again, this depends on whether airlines pass on savings.
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The Australian dollar nursed its losses across the board today as investors pared long positions amid uncertainties about China’s economic growth and weakness in Asian stocks.

The dollar fell as far as $US1.0341, from $US1.0392 in New York, having lost 1 per cent this week. It was last at $US1.0368 and looked set to test last week’s trough of $US1.0336. A break there would take it to levels not seen since January 17.
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The information contained herein is based on data obtained from sources believed to be reliable. However, we have not verified such information, and we do not make any representations as to its accuracy or completeness. Neither the information, nor any opinion expressed, shall be construed to be, or constitute a recommendation or an offer to buy or sell, or a solicitation of an offer to buy or sell, any currencies/securities mentioned herein. While all care is taken with any recommended 3rd party businesses on this site, no responsibility is entered into for any transactions conducted or advice received by the user from those companies. Any trademarks or logos used throughout this website are the property of their respective owners. Rates sourced from vendor websites or indicative based on vendor typical margins from market mid-rate. The final offer rate may differ however the vendor margin should be approximately correct. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website. Through this website you are able to link to other websites which are not under the control of BestExchangeRates. We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them. The 'Best Vendor Rate' shown is the best from amongst the banks and fx currency converters that we currently review but may no longer be so.     TOS | Full disclaimer | Privacy Statement