Money Transfer/Exchange Rate

The Bank is having to purchase euros and sell sterling on the money market for you.

How do you expect any of them to give you a price in advance or one based on a london interbank rate?!

If you want to be certain of being able to deliver euros at a specified date I suggest you purchase a future! Otherwise, you will have to live with the fact that the markets are dynamic and change, thus forcing you to accept or decline available rates when you are doing the deal!

How far in advance are we talking about here? A few minutes, or days?

My bank, HSBC, always quotes me a rate when I request them to do a transfer overseas. I don't why see any bank shouldn't be able to give an exchange rate quote for a transaction that you are asking them to carry out more or less immediately.

Chris

Exactly. I would expect a quote giving an absolute rate to be valid only for minutes. My bank can do this with options where the price of the underlying changes in minutes or seconds and there is a lever effect due to the option character, so why not with currency?

Alternatively they could quote me a floating rate plus a margin, e.g. Libor plus 0,5% or something to that effect. That way they are saying they will refinance themselves if necessary at the inter-bank rate, and charge me 0,5% for the service. I could then compare that to another bank that maybe only takes 0,3% (for example). So my question was:- what banks do this, and what banks offer good rates?

has a transfer rate that can be fixed 30 days in advance IIRC.

In message , Chris Blunt writes

For small amounts then the bank will have a rate they will quote for you for that day only. It wont work for larger amounts though.

Then you have no knowledge of the scale of the market. Your view is correct for small amounts but for large amounts why should a bank give you a fixed price when it hasnt obtained a fixed price itself?

In message , David Johnstone writes

Eh? What would that 'floating' rate be? There isnt one.

What have interest rates got to do with it? In any event 'LIBOR' for smaller amounts, and for usual periods, is far far far less volatile than currency rates. For larger amounts (substantially larger than currency dealing thresholds) LIBOR is agreed on a deal by deal basis so you would never be able to pin it down in advance without entering into some form of forward contract. So if they quoted you a 'margin' you would be in no better position than you are now because you have no way of knowing what LIBOR would be.

But there is no 'base' upon which you can perform your comparison.

For larger amounts : none

In message , fishman writes

Every bank offers fixed forward rates, there is nothing special in that.

Well, they've done it for amounts of several thousand Pounds for me. They give me a rate, I agree it, and they go ahead and process the transaction at the rate they quoted. How would anyone ever be able to buy or sell anything if nobody ever quoted a price for things?

Chris

Most banks will have a daily exchange rate sheet for amounts up to around

25000.Anything over this and you have to deal with a foreign exchange dealer who will quote you spot rate for whatever deal you want. Eric >

"john boyle" schrieb im Newsbeitrag news: snipped-for-privacy@johnboyle1.demon.co.uk...

Oh yes, true, I got that a bit mixed up. Isn't it common though to agree on a particular value, maybe a market price from a ticker e.g. as reported by a particular Reuters symbol or similar? For things like knock-in options that would be the only way really.

Of course I wouldn't know in absolute terms how much I would get. Neither would I know if yesterday or tomorrow would be better. But I would know what the bank was charging me and I could compare it with other banks.

David

In message , David Johnstone writes

No, because all that the reuters ticker (or similar) reports is the last deal. How could you lock into a a constant variable?

I see the point you make, unfortunately it doesnt quite work like that. The main reason is the lack of a reference point. For example if Bank A quoted a premium of .5 of a cent below the reference point and another a discount of .5 above, they wouldnt be working off the same reference point and the one that appeard to be ooffering the better margin could, in fact, be charging you a worse rate.

In message , Chris Blunt writes

Thats what I said. They will do it for small amounts.

Eh? Havent you heard of 'the market'? Money is dealt on a deal by deal basis, thats what all those screens and things are for in London Dealing rooms.

"john boyle" schrieb im Newsbeitrag news: snipped-for-privacy@johnboyle1.demon.co.uk...

Well, assuming as you say, that the bank actually buys currency to cover my transaction, I suppose the price they buy at is the reference point. The problem is of course there's no way I can check that price - even if they quoted me a profit margin. Is there any way a private person can trade currencies on the stock market directly? Interestingly the site that "fishman" mentioned, xe.com, does quote you an absolute rate, based on currencies and size of transaction. You have the I think 90 seconds to decide if you want to close the transaction. That's more or less what I'm looking for. I can compare the rate the site offers me to real time FX market data. I just wish more banks offered something similar.

David

"fishman" schrieb im Newsbeitrag news: snipped-for-privacy@g47g2000cwa.googlegroups.com...

Thanks, nice site. More interesting still are the spot rates. David

In message , David Johnstone writes

No, in fact nobody can. The Stock Market trades shares etc.,

The 'Currency Market' is just a huge communication network between currency traders.

Ok, I hadnt realised you wanted the best rate. I now see you are prepared to pay any rate that is fixed.

I dont think you do, unless you are prepared to pay more for the knowledge of what the rate will be.

>