Currency Exchange!

[battymum]

With the $A so strong at the moment I am keen to know if anyone has used any sort of forward currency exchange contract.

I have an ANZ travel card and put money already on to that.

But as we are not travelling until September I was budgeting on a further six months of saving, tax returns and our holiday pay to cover the cost of our trip. I could draw money from our mortgage or other savings, but then I would be losing money in interest.

What I would like to do is sign a contract to lock in the current rate, but not actually exchange funds until maturity, ie September. I know rates could go higher, but I am happy with parity and not willing to gamble.

Anyone done something similar.

 

[Sugarglider]

With regards to your actual question re: forward exchange contract - NO - I haven't had that experience.
I would imagine that this would be more expensive than buying foreign currency now (e.g. on your ANZ card) because you are essentially buying an insurance or hedging policy and would have to pay for the risk connected. But what would I know?!

I'm going in October so I have purchased the Travelex Cash Passport card. This is available at lots of places, but I just bought it online and had it delivered to my local post office where I went to pick it up.
The only difference I could see between Travelex and ANZ was fees. ANZ has a one off $11 set up fee and then charges 1.1% of loaded value. Travelex has no set up fee and charges 1% load fee. so barely nothing different - $1 in a $1000
The card can be topped up on line via BPay.

I also have a NAB Visa Debit which does not charge a foreign exchange fee or foreign exhange ATM use fee. This is a GREAT deal but one is at the mercy of the prevailing exchange rate; and usually if you want to know when the exchange rate will collapse - just look at when I am on holidays!

Travelex's exchange rate was the same as the current rate on the NAB Debit Card and better than buying at the airport - so I did it. Now I have locked in several thousand at the current rate and will pay as much of my costs now whilst the dollar is strong.

Now I am wondering ... I can't remember if the Travelex card charges a foreign use ATM fee.

If using my ordinary NAB flexi card there is a $4 foreign atm fee, and my ordinary NAB credit card charges a foreign exchange fee.

Last time I travelled I found Aust Post did a great exchange rate and no commission but you have to pre-order at least 24 - 48 hours. they do not advertise their rates. You have to go in to the shop and they have a display board. But it was worth the trip last year!

I'm gonna keep buying small tranches when the rate is good and I have available cash.

 

[PrincessInOz]

Unless you already have a stockbroker that knows how to options trade for forex, you'll probably have to complete your dollar exchange at time of purchase.

I normally buy in tranches as well, when I have the spare cash and hedge that way. The trick is to be happy with the exchange rate you get at the time you buy... for the money you changed at that time.

Otherwise, you'll end up tying yourself up in knots because either you can do better later....or you should have bought more previously.

 

[Snickals]

I used the Travelex Cash Passport card last time I went and loved it...before I went i kept an eye on the dollar and everytime it was up I would just top it up.

 

[battymum]

Thats the thing,
I am happy with the rate now, and have an ANZ card, but dont have the cash to buy!

 

[Sugarglider]

well - in a touch of coincidence - today when I open this thread there is an ad for Ozforex running on the top of the screen. They are offering forward contracts - perhaps register with them and at least check out the rates.
they offer a better exchange rate than anyone with a $15 flat fee and minimum transaction of $2000
from what i can gather they pay others on your behalf in the foreign currency. so you would book your trip, and lock in your forward contract to occur on the date you have to make final payment to the resort (or whomever). I haven't seen if they provide travel cash to you.