Know the Exchange Rates When You Travel to Canada
If you are planning on visiting Canada for a holiday, or on business, then you will want to know the exchange rates. Also, if you are in the US and trade with Canada, the rate of exchange will impact profits depending on when bills are paid.
So, it pays to have a means of looking up the USD to CAD rates in an instant and being able to decide when the best times are to make the money exchange. This may not always be possible as a business where invoices need paying, but it can make a significant difference to the amount needing to be paid if timings can work out to a company’s international advantage.
The advantage of online comparisons of exchange rates is that you can know the exchange rate in real-time. Currency can also be exchanged online while the exchange rate is good. That is to the advantage of the person wanting to exchange the currency or pay in that particular currency at that moment. Investors certainly make use of online currency exchange calculators to make good returns on their investments.
History of the US Dollar Against the Canadian Dollar
In 2007, the Canadian dollar, for the first time in nearly 31 years, was on a par with the US dollar. A 62% rise over less than 6 years was driven partly by record highs for oil prices, among other commodities.
It is good to know not only how currency rates work but the history of their figures against the currency you wish to convert to. An understanding of currency rates will indicate what will change them and how currency rates have changed over time, and this will let you know what direction a currency is heading in.
“First Day of The Month” / “Last Day of The Month”
A good strategy to adopt for a Canadian resident looking to convert to US dollars is to book to convert their currencies on the “first day of the month”. So, this will be the opposite for US residents. The reason is to do with the fact that many businesses will need to transfer money monthly to make timely payments. Presumably then, this is based on the fact that more US businesses will be doing it at a particular time and affecting the currency rate, advantaging Canadian residents at this particular time. So, this is interesting to consider and something to plot when looking at online rates from the past, present, and in real-time.
Also, making an exchange on the “last day of the month” may be beneficial to Canadian residents looking to convert to US dollars, although to a lesser extent. Results are known to vary and the strategy only has a short window of time to work. The thinking is that money will be lost spreading transactions out throughout the month or even a week in comparison.
So, these two strategies should be known by US residents so that they avoid currency exchanges at the wrong moments.
USD to CAD Cost Averaging
So then, what does a US resident do to gain the upper hand on the Canadians when it comes to currency exchange? That is apart from bearing the above in mind. Well, the best approach is thought to be cost averaging as a strategy. This is the opposite of “the first day of the Month”, as the currency pairing is approached from the other side.
For greater value for money when exchanging US dollars to Canadian dollars, whether a tourist, businessperson, or investor, you should stay clear of the first and last business days of a month. A “dollar cost averaging” approach will mean planning multiple evenly-averaged conversions within a week.
The optimum time to make all of the currency exchange transactions (not just one) when a US resident, is within the final week of a month so that the maximum amount of Canadian dollars are received in return.
To conclude, where currency rates are concerned, it makes a world of difference on which side of the exchange you are on and the timings of that exchange. There is a different approach necessary for US residents to Canadian residents, which you would expect. It is knowing those timings, as mentioned above, that will see one side benefit while the other loses. If you are a business doing a lot of international trading, then it will be important to know when your side of the exchange works out best. Someone merely going on holiday for one trip can benefit if they make the currency exchange or exchanges in advance of their holiday.
To know the best rates is also about looking at online currency convertors, which should reveal when the best exchanges have been and what the current price obtainable will be. You will always know what to expect in your currency exchange when there are online figures to view instantly and from any location where there is computer or portable device access.