Friday, May 7, 2010

Timing is the key to getting the best exchange rate


I just discovered something today that has me kicking myself for not figuring it out sooner. How many times have you transmitted an international wire only to realize the next day you should have waited? Or perhaps maybe you waited too long and the previous day's rate was significantly better. If only you could see the future or visit the past. Well, it appears that in a way, you can.

Yesterday, the US stock market went nuts due to an apparent trader error coupled with events in Europe. I was planning sometime in the near future to remit some yen back to the US, and when I saw what the yen/dollar rate had done overnight, I figured that I would be up $100 compared to sending money yesterday.

It was about 10:58 am this morning by the time I had filled out the paperwork and was standing at the postal bank counter. There was no sign up with the rates for buying and selling foreign currency, so I told the clerk the amount in yen I wanted to transfer and she gave me what it would be in USD. I was surprised to see the number was about $100 less than I expected.

The clerk at the next position over suddenly says to wait because the rate is about to change, and by the time everything is processed, the rate I was just quoted won't be valid any longer. So we wait a minute and then the clerk attending to me says, "oh yeah, it did change" and hands me a piece of paper with an amount in USD that was $100 more than the amount I was quoted just two minutes previously.

It turns out that the postal bank updates the USD-yen rate once a day at 11 am. This particular branch opens at 9 am. So that means for 2 hours you can send money at the previous day's rate.

After all the times I have sent money to the US, why am I just finally figuring this out now? I must be an idiot. In case any of you didn't know this, now you do. I searched a bit on the internet and see that this is no big secret and not limited to just the postal bank.

If you wake up one morning and say oh crap, I should have sent that money yesterday, then get to your nearest post office and submit the paperwork before 11 am.

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