By Amanda Morrall (email)
There's a great scene from a gangster movie I once watched where the tarted up wife of a mobster tells her hubby she's going shopping.
He asks how much she'll need. She gives him the finger in reply. No, not the middle one. Rather she stretches her forefinger up to the sky while lowering her thumb in the opposite direction, gesturing the approximate amount by depth. As I seldom lay my hands on cash these days, I haven't a clue how many $100 bills that would be. A lot I'm guessing.
Now if you were to pinch your finger and thumb together you can visualise the rough amount I was looking to have changed into New Zealand dollars. A modest amount but still worth making hay out of on the exchange rate I reckon. No, I'm not laundering drug money.
As is my usual habit, I exploited my sources to find how to get the best deal.
Amanda: "Uh, David (big boss) do you reckon this is a good time to change some USD into NZD?"
David: "Haven't you seen our charts?'
Amanda: "There's a million, which one?"
Big boss then kindly pointed me in the direction of the following chart (the daily exchange rates) which can be found on the exchange rate section of our charts section.
Charts get people in my office very excited or nervous, particularly those who have to build them. I get interested in charts when they have relevance to my life. I was all ears on this one.
David pointed out the relatively static line of the NZD/USD over the past three months, and then contrasted them with sharp spikes. The most recent prominent northbound hike was back in August when one New Zealand dollar was worth $US 0.8702. That compares to March 2011, when one New Zealand dollar was worth US$0.717
To make the most of my greenbacks, I want the rate to be tracking southbound. As the rates haven't been all that volatile over the past three months, big boss suggests that now is as good a time as any to make the switch.
Right, so who is going to show me (more) money?
Our live exchange rate tool tells me what's happening moment by moment with the major exchange rates so I can see what's going on with currency markets.
For a moment I get excited as it looks like the rates around .8130.
We then check out our selling foreign currency page which shows me how the banks compare on FX rates for the day. The rates actually show what the banks are selling foreign currency for TT ("telegraphic transfers" = wire transfer) rather than cash currency but Big Boss informs that the most competitive in the cash sell department will in all likelihood be the most competitive on the TT selling front too.
For U.S. dollars it was ASB yesterday. Today it was ANZ. Sadly, neither is close to the market rate given I have cash. They rates are better is you're moving money electronically. It was more in the order of .8570.
The spread between the live exchange rate and the buy rate (for cash) at the banks was higher than I expected. Not entirely surprised though especially after our story on the reader who got massively stung by the ugly retail spread converting Aussie into NZD on the other side of the Tasman. If you missed it, well worth a read. See also my interview with former FX dealer Fiona Whyte.
We have a travel currency calculator that does the work for you (by factoring in fees and minimum charges) pointing you in direction of the best rate on offer on a particular day. The rates however are for buying currency - that is what the bank is prepared to sell a particular foreign currency to you for.
I have calculated I will save myself a few dollars at most by taking my greenbacks to the ANZ today. I could sit on my hands for a bit and wait for the Kiwi to tumble against the USD, or I could head down to Queen Street and see if I could get a better deal from a private vendor. Whether it would be worth the extra petrol, time and effort is another matter? Probably only by a stretch of the imagination perhaps and a 10-centimetre span between thumb and finger.
To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall
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