The forex market is a huge and fascinating entity, and one that sees an estimated $6.6 trillion traded globally every single day. However, people often forget that this market is also underpinned by constantly changing currency rates, which have a direct impact on the cost of buying and selling currency for travel.
In this respect, the foreign exchange has a more universal application in the real world, as it dictates the cost of currencies for travellers and the rate at which money is transferred from one fiat currency into another.
But how exactly can you save cash while travelling overseas? Here are some tips to help you achieve your objective:
- Research Local Currency and Real-time Exchange Rates
Whether you’re a forex trader or simply someone who wants to exchange their domestic currency at the best possible rate, knowledge is the single biggest tool to help you achieve your objectives.
More specifically, having access to real-time and constantly fluctuating exchange rates enables you to monitor the marketplace, while understanding the market and its movements also creates the opportunity to forecast short-term trends.
There are several ways in which you can do this, with independent currency converters such as Xe offering access to live exchange rates across a range of major and minor global currencies.
Similarly, online trading platforms provide detailed information pertaining to targeted currency pairings and real-time price movements. If you know how to use these platforms, you can also analyse the underlying trends that drive price movements and make accurate forecasts for the future.
2.Use a Card That Offers Competitive Exchange Rates
On a similar note, you can also use a variety of dedicated cards that offer fixed and competitive exchange rates in the modern age.
Many of these also remove pesky withdrawals fees from international ATMs, which can eat into your budget considerably, causing costs to accumulate quickly in a relatively small period of time.
Perhaps the best aspect of these cards is that they eliminate the risk posed by fluctuating exchange rates and price points, by offering a fixed and competitive alternative that serves as a broad average across the board. This is certainly more advantageous than simply using a credit or debit card that will leave you at the mercy of rates and inflated fees.
Before making a confirmed choice, just remember to check out the withdrawal limits and how much you can hold on the card. Otherwise, you may limit your daily withdrawals in a way that has an impact on your spending while overseas.
3.Consider Whether it’s Better to Use Your Domestic Currency or the USD
Depending on where you travel to, you may be able to use a variety of currencies from your own domestic option to universally popular currencies such as the Euro and the USD.
This may ultimately prove to be more cost-effective in many instances, especially if you’re able to visit stores and restaurants in your chosen location that accepts the GBP (from a British perspective, at least).
Even if you can’t use your domestic currency on your travels, the USD may provide a competitive option. After all, this is the world’s most dominant reserve currency, and you’ll find that most global chains accept the dollar while processing transactions at a genuinely competitive rate.
If not, just be sure to check the range of viable currencies in play before deciding how to spend your cash while overseas.