There's only one exchange rate

Re:There's only one exchange rate by JumpCrisscross on Thursday October 25, 2012 @09:30AM (#4697538)

Nobody can transact at the mid-market rate (average of the best bid and best offer). It is a theoretical metric derived from the order book (or at least the portion of the global order book visible to you at the time of calculation - unlike stocks there is no requirement for quotes to be made publicly available). Yes, your bank is making a spread off you but no, not receiving the mid-market rate is not evidence of being screwed.

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Re:There's only one exchange rate by vitobcn on Thursday October 25, 2012 @10:48AM (#4697825)

I wouldn't agree. Obviously, there needs to be a spread, but receiving a 1.23 rate when it should be around 1.29 is getting screwed. That's higher than 5% when there is no reason for it to be.

Banks can set a fixed daily rate or a yearly one, it is their arbitrary decision. And obviously, they set it this way because it gives them a nice profit and they can get away with it.

Living abroad, I have transferred money in many occasions, and any FX broker will set their exchange rate on the spot or at most up to a minute basis. In this case, it would mean having a spread such as 1.288-1.292 (and probably tighter) instead of the one quoted by the traditional bank.

I was outraged when I discovered the FX GlobalTransfer service offered by Oanda and learnt that my bank had been overcharging hundreds of $.

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Re:There's only one exchange rate by bemmu on Thursday October 25, 2012 @11:26AM (#4697963)

Any tips on how I could be saving in this situation?

My service Candy Japan gets most of its money via PayPal in USD. I have to convert this to EUR to get it to my Finnish bank account. Then from the Finnish bank account I need to transfer it to my Japanese bank account to actually be able to buy the product and pay for shipping here. Neither accepts PayPal or debit card directly.

I created my PayPal account when I was still living in Finland, so it doesn't offer me the option to withdraw directly to Japan.

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Re:There's only one exchange rate by forgotusername on Thursday October 25, 2012 @11:42AM (#4698012)

The cash market spread is usually something like 4-6 basis points for major pairs (i.e. 0.04%), even accounting for the fictitious mid rate, you still have orders of magnitude difference from the retail spreads. Thomas Cook, a major UK travel agent, is currently offering around 6% for GBPUSD going by their web site.

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