- Posted by Tom on September 22, 2014 in Market
Any time there is a major political controversy – including an election – exchange rates are likely to seesaw a bit. The recent success of John Key’s National Party in retaining the reigns of power in New Zealand is likely to mean the value of the NZD will remain strong against the USD.
Three More Years of National Government
The markets like consistency and they also like market oriented politicians. The combination of John Key and his finance minister, Bill English, has proven to be a winning recipe for the New Zealand economy in the past. The fact that they have won with a significant amount of public support will put them in a strong position to push economic reform without being hindered as much by other parties, something which has caused them problems in the past.
Mr Key himself was a senior currency trader with Merrill Lynch in Singapore before returning to New Zealand to take the reigns of the country. Unlike many other New Zealand leaders this means he has a very real understanding of how the forex market works and what is good for the value of a currency in general.
Monetary Policy in the US
The NZD has, along with many other currencies, been on a downward trend against the USD in recent weeks. The resurgence of the USD in the past few weeks is a result of substantial changes to general monetary policy that are being made Continue Reading…
- Posted by Tom on September 19, 2014 in Financial Tips
This is very much a loaded question, as questions of this nature often are – the reality is that there are a number of things that influence the answer to where the best place for currency exchange is in the UK. You need to consider how much money you need to exchange, which direction the exchange is going in, how quickly you need it in your hands and what your intention is.
Are you exchanging currency for your own use while abroad? Are you exchanging it to send to a loved one? Also, how much currency you plan to convert is going to have a lot to do with what your best choice will be.
The big question is: what are the options? Let’s take a look at them now.
The Traditional Banking System
This is a good choice for currency exchange and the default choice for most people, but it is possible to get much better rates elsewhere. One of the reasons that people tend to favour the banks over some of the smaller currency exchange houses is that they are often more transparent with their rates. The downside is that they are also less flexible and tend not to take advantage of the extremely regular fluctuations that the foreign exchange markets are famous for. They tend to set their rates on a daily basis and that means the rates are appropriately padded to cover the institution in the event of a sudden Continue Reading…
- Posted by Paul on July 24, 2014 in Market
If you’re an expat working in New Zealand, or you have any ongoing interests in the value of the NZ Dollar against other currencies, this post is here to help you get a better understanding of the forces that determine that value. We’ll look at how interest rates affect exchange rates, New Zealand’s key trading partners (including the United States), and what this all means for OrbitRemit customers sending money out of New Zealand.
Interest Rates and the Reserve Bank
One of the key factors in determining the relative value of currencies is the interest rate differential – in other words, the difference in the interest rates set by each country’s reserve bank. For example, in determining the NZD/USD exchange rate, the interest rate set by the NZ Reserve Bank is weighed against that set by the Federal Reserve in the United States.
Right now, the New Zealand Dollar is relatively strong compared to five or ten years ago, and in part this is related to the declining value of the USD over that time period, which in turn is tied in large part to the Federal Reserve’s historically low interest rates and rounds of quantitative easing.
Yesterday the NZ Reserve Bank raised the Official Cash Rate from 3.25% to 3.5%. However, the Reserve Bank is also warning that the current value of the New Zealand Dollar is unsustainably high, and a sudden fall may occur Continue Reading…
- Posted by Tom on July 23, 2014 in Market
The Australian exchange rate has remained strong and steady against many of its major trading partners in recent months. The last few years have seen the AUD strengthen significantly against the US Dollar – but is the strength of the Aussie Dollar destined to last much longer? In this post we’ll look at some of the factors influencing the strength of the AUD, with a particular view to the likely futures of the AUD – GBP and AUD – NZD exchange rates.
Factors Influencing the Australian Exchange Rate
As with any currency there are dozens of factors that can affect its value, but let’s zoom in on two of the biggest domestic influences on the value of the AUD: mining, and the recent budget announcements.
The Mining Economy
Mining has been the driving force of the Australian economy for some time now and this boom has been one of the major contributing factors to the near-50% appreciation in the value of the AUD in trade weighted terms over the past 10 years. This boom has been pinned in large part to the rapidly growing demand for commodities in the expanding Chinese economy – the China-driven rise in demand for Australian assets and drove up anticipated returns on investments made in the Australian resources sector.
The Recent Budget and Business Confidence
The recent budget announcements made by the new Tony Abbott-led government, caused a drop in consumer confidence – but, importantly, this was Continue Reading…
- Posted by Paul on July 22, 2014 in Market
This post is here to help you carry out a currency exchange comparison – in particular, for comparing currency rates on international transfers between banks and popular online transfer services.
Compare Money Exchange Services: Understanding Buy and Sell Rates
Before you go exchanging currency, it’s important to understand that there are really two rates any institution uses in the currency conversion process. There is the buy rate: the rate at which the bank or service buys the currency in question. Banks trade currency on what’s called the ‘inter-bank market,’ a market which the average person does not have direct access to. Then there is the sell rate, which of course is the rate at which they sell that currency. Any time a currency transaction occurs, there is a gap between these two – the size of that gap in large part determines how good of a deal you, as a consumer, get on your currency exchange.
Let’s take currency exchange rates in the UK for example: imagine you want to convert GBP into AUD. There are effectively several transactions happening here. At a bank, the bankers are effectively selling your GBP at the sell rate which is available to them, and buy AUD at the buy rate that’s available to them. However – crucially – these rates are often significantly different from what they actually display to you. This allows them to pocket the difference on these transactions as profit.
Currency Exchange Continue Reading…
- Posted by Lauren on July 21, 2014 in Technology
In the age of the Internet, it’s simple to send money around the world in a matter of minutes from any laptop or smartphone. But it hasn’t always been so easy – this infographic outlines the evolution of electronic funds transfers, from their origins with Western Union and physical wire transfers in the 1800′s, through to modern day international transfer services like OrbitRemit which make it easy to send money anywhere, even to developing countries, from any Internet-connectable device.
- Posted by Paul on July 18, 2014 in Financial Tips
Where can I exchange foreign currency? It’s a common question for someone returning from an overseas trip and looking to get the best possible deal on converting any leftover foreign money. Likewise, if you’re planning an overseas trip you may want to stock up on some cash for your destination country beforehand, at a time when the exchange rates are working in your favour. This post will guide you through the process of exchanging physical currency – where and how to do it to get the most for your dollar.
Where to Exchange Foreign Currency
There are two primary physical outlets which make it easy for you to exchange currency:
Currency exchange outlets – these are dedicated stores whose only business is exchanging currency. They are common in tourist areas of major cities all over the world. They tend to have high fees and less than favourable exchange rates.
Banks – virtually all major banks can convert cash to or from any currency right there on the spot. Their fees and rates tend to be a little better than what you’ll get from a dedicated currency exchange outlet (although not always).
You’ll typically find both of the above options in airports, which is convenient for last minute money exchanges before a flight or just after you’ve arrived in your destination. Bear in mind though, if you exchange currency in the airport it’s very unlikely you’ll be getting a good deal. Airport money Continue Reading…
- Posted by Tom on July 16, 2014 in Financial Tips
In this post we’re going to look at the options available for sending money overseas from Australia, and provide a few little tips and tricks to help you get the best exchange rates and save money in the process.
Let’s start by comparing the two main ways people send money out of Australia: using bank transfers, and through specialized online services.
Sending Money Overseas Through Banks
This is the first port of call for most people living and working in Australia long term who need to send money overseas. The natural tendency is to simply ask your bank what they can do for you when it comes to transferring money overseas. What you’ll realize pretty quickly, however, is that most Australian banks charge a small fortune for these kind of transfers. There are typically hefty fees involved, but that’s not the worst part – where you really lose out when transferring through banks is on the exchange rate.
Sending Money Online from Australia
There are a wide variety of online services now offering money transfers out of Australia (OrbitRemit included) and a good number of them are faster, cheaper and offer better exchange rates than the typical bank deals.
Online transfer companies tend to be able to offer consumers better deals because they’re not burdened with the same costs that the major banks have. Some people are a little wary of online transfer services for security reasons, but there’s no basis for these concerns – Continue Reading…
- Posted by Tom on July 14, 2014 in Financial Tips
How long do international bank transfers take? The answer to that question depends heavily on which bank you’re using and where you’re sending the money to (and from). Transfers between developed countries tend to be relatively fast compared to transfers to or between developing nations.
The short answer is that an international bank transfer can be instantaneous, or it can take 5-7 business days. In some cases, transfers will take even longer than this, however around a week is a fairly standard time frame for many overseas transfers. But why does it take so long? The answer is not technology – with the Internet, there’s no reason money can’t be sent instantaneously across the globe. Let’s look at some of the factors that can hold up an international transfer speed.
Why Do Transfers Take So Long?
In most cases it’s simply a matter of the time it takes to process a large number of transactions happening all over the world at any given moment. Long story short, banks that take a long time to transfer money are generally dealing with a very high volume of transfers (or at least high volume in relation to the resources they have for processing those transactions). Even with a totally automated process, there may be thousands of other transfer orders being placed at the same time as yours if you’re sending money through a major bank – that takes time to process.
Sometimes there is also Continue Reading…