Do you plan to move to Canada? Read on for 4 ways to improve your foreign exchange rate when you do!
1. Find out if the current exchange rate is good or bad.
To get the best foreign exchange rate when you move to Canada, you need to know if the current exchange rate is good or bad.
To find out if the exchange rate is good or bad, talk to a currency dealer. They’ll tell you how the Canadian dollar is performing.
For instance, it might interest you to know that currently the US dollar and Euro are at their strongest against the Canadian dollar since November 2011.
What this means is that if you were to buy Canadian dollars, you would get a higher total now than at any time in more than 18 months.
2. Find out what’s going to happen next to the exchange rate.
Of course, no one can tell you for certain what is going to happen to the exchange rate, but having a rough idea in mind will help you decide whether it would be better to exchange currencies now, or to wait.
For instance, right now there’s a very good chance that the US dollar will strengthen further against the Canadian dollar.
This is because the US economy is approaching top gear at present, while Canada expanded a disappointing +0.1% in April.
Again, to get a forecast for the exchange, talk to a currency dealer.
3. Don’t get greedy with your exchange rate.
When a good exchange rate becomes available, take it. Don’t wait to see how high the exchange rate goes.
This is because the foreign exchange market is extremely volatile, with currencies liable to rise and fall extremely quickly.
For example, the Australian dollar lost 13.0% against the US dollar between April and June this year, falling from 1.05 to 0.90 in just 90 days.
Were you to have transferred money from Australia to the US, you would have hence lost thousands of dollars.
Given this, it is prudent to take a good exchange rate the moment you see it, rather than wait to see what happens.
4. Don’t accept the first exchange rate you’re offered.
If you are using your bank to buy Canadian dollars, you could be getting a poor exchange rate.
Instead, if you use a specialised foreign exchange broker, you will get an exchange rate up to 4% better, which could add up to thousands extra.
For instance, suppose you plan to emigrate from the USA to Canada and want to transfer $250,000.
Right now, a bank might offer you an exchange rate of 1.00 for each Canadian dollar, which means you’ll receive CA $250,000.
However, a foreign exchange broker might offer you 1.04, which adds up to CA $260,000, or +CA $10,000 extra.
About the author
Peter Lavelle is a currency dealer at foreign currency broker Pure FX. To find out when the best time to buy Canadian dollars, sign-up to Pure FX’s free newsletter. We’ll tell you when the best exchange rate becomes available.