Step-by-step instructions on exchanging AUD for USD
January 12, 2011 5:57 PM Subscribe
My brother (worried about the economy due to Australia's floods) wants to buy 40-50k in US Dollars. I know nothing about foreign exchange trading, except that apparently banks rip you off. Can anybody please give us some places to look, and some idea of how much this will cost? I pretty much need step-by-step instructions.
Working long hours at the mines, my brother doesn't get a chance to make phone calls within business hours. Would really appreciate your help.
My brother is in Western Australia working on the mines, but his home is in Queensland (Gold Coast) so contacts there would be good, or Sydney is fine too. My brother isn't overreacting, he has a legitimate reason to require USD in particular, in the near future. My brother already had plans to buy USD later on in the year, but now that the economy is uncertain, he would prefer to do it asap.
Working long hours at the mines, my brother doesn't get a chance to make phone calls within business hours. Would really appreciate your help.
My brother is in Western Australia working on the mines, but his home is in Queensland (Gold Coast) so contacts there would be good, or Sydney is fine too. My brother isn't overreacting, he has a legitimate reason to require USD in particular, in the near future. My brother already had plans to buy USD later on in the year, but now that the economy is uncertain, he would prefer to do it asap.
To clarify, he wants to convert AUD into USD to be deposited in some sort of bank account, instrument or security, right? I am not familiar with Australian consumer finance, but I would expect that there are brokerages where can buy some US government securities (again, not my area) that are going to replicate holding US dollars, even if he can't maintain a USD-denominated account.
posted by iknowizbirfmark at 6:28 PM on January 12, 2011
posted by iknowizbirfmark at 6:28 PM on January 12, 2011
I would advise your brother to buy the securities of large, multinational Australian companies, such as MacQuarie Bank, which derive a large portion of their revenues outside of Australia. It sounds like the intent here is to less exposed to the volatility of Australia's currency.
Investing in large multi-national companies that derive revenues from outside their home country is a cheap way to achieve this without having to worry about currency exchange rate fluctuations and commissions. And, frankly $50,000 USD is not a big amount to trade in the foreign exchange (FOREX) markets (which trade over $1 trillion USD per day).
posted by dfriedman at 6:36 PM on January 12, 2011 [1 favorite]
Investing in large multi-national companies that derive revenues from outside their home country is a cheap way to achieve this without having to worry about currency exchange rate fluctuations and commissions. And, frankly $50,000 USD is not a big amount to trade in the foreign exchange (FOREX) markets (which trade over $1 trillion USD per day).
posted by dfriedman at 6:36 PM on January 12, 2011 [1 favorite]
Currency trading is risky, and if he thinks he's worried now...
posted by KokuRyu at 6:38 PM on January 12, 2011 [2 favorites]
posted by KokuRyu at 6:38 PM on January 12, 2011 [2 favorites]
I don't know about Australia specifically, but in Europe it's not hard, if you go to a big multinational bank, to open an account denominated in something other than the currency of the country you're in. (E.g. if you're in Hungary you can pretty easily get one in HUF, EUR, or USD.) So maybe going to a bank like HSBC, which has Australian branches, would allow him to open a USD account without too much trouble.
If he just wants exposure to USD as a hedge against a falling Australian dollar, that's a bit of a different question than actually holding US dollars. You can get dollar exposure (in different amounts) via investing in companies that do a lot of business with the US or derive revenue there, or by investing directly in major US blue-chip companies that trade on Australian exchanges. But that won't actually give your friend a bucket of USD to spend from at some future date, if he has an actual need to spend dollars. For that, he'll need a USD-denominated bank account.
posted by Kadin2048 at 7:05 PM on January 12, 2011
If he just wants exposure to USD as a hedge against a falling Australian dollar, that's a bit of a different question than actually holding US dollars. You can get dollar exposure (in different amounts) via investing in companies that do a lot of business with the US or derive revenue there, or by investing directly in major US blue-chip companies that trade on Australian exchanges. But that won't actually give your friend a bucket of USD to spend from at some future date, if he has an actual need to spend dollars. For that, he'll need a USD-denominated bank account.
posted by Kadin2048 at 7:05 PM on January 12, 2011
Is there a reason why he can't just use a foreign exchange (forex) broker? Usually they offer better rates because they specialise in this type of transaction.
In the UK there are several that cater mostly to people buying property abroad. I don't know about Australia, but a quick google.com.au search found this company: World First. They have UK and Australia offices so they might be able to be flexible about what time he contacts them. (I no nothing about this company itself, there are bound to be others).
I'm sure that any forex broker can walk him through exactly what he needs to do.
If it's just that your brother thinks the exchange rate is likely to be better now than in the future (but wants to use the money later), he can set up a transaction that fixes the exchange rate now, but he buys the US dollars at some future point in time. That may or may not be a better deal.
Currency trading or investing is not for the faint-hearted and there are probably easier ways to get exposure to the US market if that's all he's trying to do.
posted by plonkee at 11:20 AM on January 13, 2011
In the UK there are several that cater mostly to people buying property abroad. I don't know about Australia, but a quick google.com.au search found this company: World First. They have UK and Australia offices so they might be able to be flexible about what time he contacts them. (I no nothing about this company itself, there are bound to be others).
I'm sure that any forex broker can walk him through exactly what he needs to do.
If it's just that your brother thinks the exchange rate is likely to be better now than in the future (but wants to use the money later), he can set up a transaction that fixes the exchange rate now, but he buys the US dollars at some future point in time. That may or may not be a better deal.
Currency trading or investing is not for the faint-hearted and there are probably easier ways to get exposure to the US market if that's all he's trying to do.
posted by plonkee at 11:20 AM on January 13, 2011
« Older How do I teach my left-handed son how to play the... | How can I overcome these negative feelings about... Newer »
This thread is closed to new comments.
(Lordy, why Us dollars? I know this isn't the answer you were seeking, but tell him to buy silver or gold.)
posted by brownrd at 6:21 PM on January 12, 2011