as in, I've been watching the rate of the GBP (& Euro) via yahoo finance ticker as well as XE, etc, today I went to pull the trigger on "depositing" 2600 GBP (cash) in my JPM Chase account but was told I was getting 1.49 on the Pound. XE & Yahoo Finance tickers were showing 1.595ish at the time the Wife went to deposit. We were told we will get the rate whatever it is at time of deposit... I've been waiting for it to come back up, and today it was a bit (willing to accept) 1.59 (as opposed to hoping for the old days of 1.62/63/64...65/67.
Why .10 difference in what Chase was quoting vs. XE and the like?? I Don't understand Bid, Buy difference but Freakin' 1.49 was horrible so we didn't cash in, but now watch, tomorrow I'm sure it'll go back to 1.56/57..55 & Chase will quote 1.35/36/37 (old/prior) Euro rates!!! I need this cash in my account but just feel like I'm getting bent over the table here!!! I also did a transfer of Euros to $$'s... scared but curious what that'll look like in a day or 2 when it hits my acct...
What's the deal Guys???
That said, here is some info on rates.
The rates you see on sites such as XE, Yahoo etc are figures accumulated from various foreign exchange markets. No one authority sets a rate for any freely traded currencies (currencies with rates controlled by their own central govts are the exception) so in each market there are posted offers from traders for each currency to either 'buy' (bid) or 'sell' (ask) at prices which typically leave a bit of room in between - each side is trying to get the best deal possible after all!
The currency sites are taking these real time bid and ask prices and estimating a fair price in between the two and that is the "rate" they present to you on line.
But when you buy (or sell) in the market yourself you will be paying the actual sell/bid price offered, not an estimated middle ground price that XE made up. So you already have some difference there.
Depending on your broker or service you may also pay an additional commission or fee on top of this, further taking you from the online rate you saw originally.
Then, in some cases, such as when you buy foreign currency at a bank or airport for travel purposes, you will see a further adjustment because of the added costs of managing (transporting, securing, record keeping, compliance etc) the actual cash or transaction. Liken this to the difference between wholesale and retail pricing - you won't buy OJ in the grocery store at the same price as its traded in the pit in Chicago.
Thus the price one sees online through these services is almost never the price you will actually buy or sell at as an individual.
Hope that helps.
http://www.economist.com/content/big-mac-index
http://www.kitco.com/gold_currency/index.html?currency=no&timePeriod=d&flag=gold&otherChart=hardCur
So, move in volume or just take the advertised rate as-is.
Sometimes it feels like a gigantic scam. But in a couple of years, that will entirely change.
That said, here is some info on rates.
The rates you see on sites such as XE, Yahoo etc are figures accumulated from various foreign exchange markets. No one authority sets a rate for any freely traded currencies (currencies with rates controlled by their own central govts are the exception) so in each market there are posted offers from traders for each currency to either 'buy' (bid) or 'sell' (ask) at prices which typically leave a bit of room in between - each side is trying to get the best deal possible after all!
The currency sites are taking these real time bid and ask prices and estimating a fair price in between the two and that is the "rate" they present to you on line.
But when you buy (or sell) in the market yourself you will be paying the actual sell/bid price offered, not an estimated middle ground price that XE made up. So you already have some difference there.
Depending on your broker or service you may also pay an additional commission or fee on top of this, further taking you from the online rate you saw originally.
Then, in some cases, such as when you buy foreign currency at a bank or airport for travel purposes, you will see a further adjustment because of the added costs of managing (transporting, securing, record keeping, compliance etc) the actual cash or transaction. Liken this to the difference between wholesale and retail pricing - you won't buy OJ in the grocery store at the same price as its traded in the pit in Chicago.
Thus the price one sees online through these services is almost never the price you will actually buy or sell at as an individual.
Hope that helps.
Swirling Eddie is right that the quotes you see are informational and approximated from trades that are occuring at differing prices. The other big difference is that those quotes are appropriate at the bank or institution level of transactions. You're never going to get that price on 2600 GBP. Maybe if it was 26 million
Either that or find someone going to england and do a swap with them.
Why do you have so many pounds in cash anyway?
I'm home on "vacation" and wanted to cash in the GBP to dollars where I need it.
I'm not TRADING CURRENCIES! Just a common man looking for the best deal possible. Guess I'll just have to take it in the ass and cash out... (have no interest in learning about markets/trading/investing, but thanks for the links anyway)
Too much information, dude. What does that have to do with exchanage rates anyway?
the bank note rates you were quoted are typical. bank notes have to be transported counted stored insured etc etc. retail banknotes is a different ballgame from interbank.