New Zealand Dollars - Exchange and interest advice please.

samizdat

bendix wrote: »

You will never get the xe.com rates. They are wholesale rates. Banks work on retail rates, and obviously there is a margin there. Don't sweat the small stuff.

Well, I actually think it is worth using a currency broker to exchange these kiwi dollars because, if you use HSBC or any other bank, you will likely lose around 5% of your cash on the spread, which is over a thousand quid. This is a ballpark figure, which could be wrong, because available rates aren't quoted (at least not easily found) on the internet and I am not going to ring people up to get a more accurate estimate.

Not sure which broker to recommend for the kiwi dollar. As the kiwi is a minor currency, I expect that there will be specialist brokers who will be much more competitive than some other generalist brokers. Google for it and maybe concentrate on advice in expat forums, where people worry enormously about the exchange rate because they are emigrating with cash proceeds from house sales. Your sum is not quite that large but advice should still be relevant.

samizdat

pimento wrote: »

Is there a way of getting a better rate than HSBC's? I know that you can get xe.com's by creating an account with them, but I don't really understand the nuts and bolts of how it works and if there is any risk involved.

The nuts and bolts are that you basically open an account with a currency broker that you have researched. Your criteria in choosing a broker are: 1) The broker trades in and is competitive in trading the kiwi dollar (not all brokers will trade this currency); 2) The broker has a good reputation that you have established by reading about people's experience with it (Google);

Then, once you have set up the account, which you can usually do online or over the phone, you execute your trade by ringing them up and saying: "I'd like to sell NZ$58,000 (or 48,000 if you are hanging on to some) and buy sterling". The broker will quote you the exchange rate they will offer at that moment. You check the rate against xe.com to see if the spread is somewhat reasonable and maybe say "oh, I was really hoping you could give me 2.xx (a tighter spread)" and they say "sorry, we only do that rate for bargains over £100,000 [or something like that] but we could give you 2.xy [some slightly improved rate]" and you say "oh, all right then, I will accept that rate" and then the broker will reconfirm all the details and tell you how to settle the trade.

Generally, for a foreign currency holding at a UK bank (you have kiwi dollars in a UK bank), I would expect you to have to ring up HSBC and organise a wire transfer to the broker's account. The broker will give you the correct bank details and the reference to use to identify your funds.

Not very difficult and you will save quite a lot of money. FWIW, I wouldn't bother to keep NZ$10,000 for your holiday - it will be more efficient to use a card with low foreign exchange loading, e.g. Nationwide cards but there are others. (Unless you have a cash card that lets you withdraw kiwi dollars from your HSBC account, I don't see how you will access the kiwi dollars when you are in NZ and, furthermore, you are earning zero interest in the meantime.)

Jonbvn

Before you go to an FX broker, I would suggest you contact HSBC directly. They offer better rates when you exchange £20k+.

TOP_CAT

Can someone explain differance between 2%levy and non resident 10% tax on savings accounts.I have 10% non res on accounts ,but banker kind of sidestepped the 2% levy question.Is it only for certain people?Thanks

TOP_CAT

I found posters info on rise and falls in nz markets very interesting.Are there websites you can recommend for us less financially able,in a simple way to understand to increase knowledge.Or is this from years of working in finance in nz/london etc

The last poster has outlined a path (with bit of research) on money transfer,this is very helpful too alot of people, I like the extra helpful detail.No connection to broker at all?(You have to ask these days and I mean no offence)
.
So does anyone attempt to make money as OP has on exchange highs and lows using brokers as decribed, it sounds simplistic I know..but 15% is good.
If these highs/ lows are steep as stated over what lenght of time has this been ,recently I can understand?.
But then again nz,s tend to keep good things simple,so working the exchange? maybe its happening more recently,with nz,s that work in the city (lon).

Its risky Im sure, but still would relate too sterling/nz exchange methods if anyone can comment.

laffer

What are peoples thoughts on the AUD? It seems to be skyrocketing as well against all the currencies. It is even over 50p against the pound which is a disaster if you want to go there. Will it collapse any time soon?

bendix

laffer wrote: »

What are peoples thoughts on the AUD? It seems to be skyrocketing as well against all the currencies. It is even over 50p against the pound which is a disaster if you want to go there. Will it collapse any time soon?

It's strong, because the Aussie economy has been much less affected by the recession than most of its major trading partners. It still has healthy foreign reserves and relatively high interest rates. Plus the strong commodity prices are helping it.

I'd expect the Aussie to stay reasonable strong for a year or so, then track backwards as the rest of the world realigns itself.

sabretoothtigger

yea aussies are strong this time round. China is buying from them so they are close to alot of growth.

Recently heard of a 40bn purchase by china of natural gas from australia, this is over 20 years but its typical of the strong trade they seem to have.


This guy is an international currency analyst based in the uk:
http://twitter.com/alaidi

What are peoples thoughts on the AUD? It seems to be skyrocketing as well against all the currencies. It is even over 50p against the pound which is a disaster if you want to go there. Will it collapse any time soon?

Oil price has spiked recently which leads to volatility in currency apparently.

Its one of the few currencies to outperform sterling this year Ive read, it wont collapse but the picture is set to change according to that guy above.
In general its risen for good reason afaik

bendix

tom.daniel wrote: »

Ozzie is very strong but near the top against sterling i believe. I dont thin there will eb a crash unless we see another stock market collapse, but it shuold go much stronger than 1.9600 against sterling

So, on the one hand you think it is near the top and on the other you think it should go much stronger.

You like betting each way, obviously.

laffer

To be fair I think the word 'not' may have been missing from his post.

I cannot understand the strength of the AUD personally. I understand that China has been investing into Oz a fair bit and as such there is some growth potential there but has the market not factored in the recent coolness in the relationship between australia and china? I am not sure it is as rosy as some might want to think.