Help for the monetarily challenged
April 3, 2011 3:03 AM Subscribe
A friend, who's as bad at numbers as I am, has money in an American bank account. He needs to pay for something in Switzerland. Is there any advantage to changing the dollars to euros and then to Swiss francs, or is a direct dollar-franc transfer the best way to go?
This is not a question about hedging or speculating or the best time to make the transaction. We just can't get our heads around the math to see which would be the most efficient exchange.
This is not a question about hedging or speculating or the best time to make the transaction. We just can't get our heads around the math to see which would be the most efficient exchange.
... and check if the seller might be willing to accept USD in payment. If by coincidence the seller is in the market for USD, s/he might be willing to give you a more favourable rate than a bank.
posted by labberdasher at 3:41 AM on April 3, 2011
posted by labberdasher at 3:41 AM on April 3, 2011
Direct is best because you pay a fee for each currency exchange.
posted by dfriedman at 4:47 AM on April 3, 2011
posted by dfriedman at 4:47 AM on April 3, 2011
There are large numbers of speculators who take any opportunities they can find to profit off discrepancies between the franc/dollar and euro/dollar exchange rates (this is what arbitrage is about). The net result of their activity is that the exchange rates even out over all but the shortest of timeframes (ignoring real changes in the values of the respective currencies, which you've said you're not interested in), and as mentioned above for the purposes of your friend's transaction any difference due to exchange rates will be miniscule compared to the cut the intermediaries will take.
posted by A Thousand Baited Hooks at 4:53 AM on April 3, 2011 [1 favorite]
posted by A Thousand Baited Hooks at 4:53 AM on April 3, 2011 [1 favorite]
Response by poster: Thanks everybody. Friend is happy.
posted by Paris Elk at 1:35 AM on April 6, 2011
posted by Paris Elk at 1:35 AM on April 6, 2011
« Older How would you make a scaled plan of photo/art... | Bonus Points for Vintage Moog Hardware Newer »
This thread is closed to new comments.
posted by The Shiny Thing at 3:11 AM on April 3, 2011 [4 favorites]