The following is a collaborative post on tips to use the currency markets to holiday this summer
Author – Sophie Davidson
For many, choosing where to go on holiday is usually and understandably based purely on where they’d particularly like to go. Maybe there’s a ‘number one’ destination that’s long been on your hitlist, or maybe it’s simply a case of choosing from a few based on price and what’s available. How about the idea of choosing based on affordability once there? In other words, a decision based on how far your money will go overall.
An attractive holiday purchase price is all very well, but this can be affected by the costs once at your holiday destination. By checking exchange rates and doing some research, it may be possible to save money and it could influence where you jet off to.
At certain times particular currencies are strong or weak against others. For example, when the Euro is weak against sterling then holidays in Eurozone countries are generally good value.
2. Currency and financial update services
There are many online and subscription style services and apps that keep you up to date regularly with currency movements, trends and bank interest rates. This can help you spot a trend or be forewarned of possible factors that might affect currency movements further down the line.
3. Research good deals on destinations
An online search will reveal recent articles and blogs on cheaper places to go on holiday. Many may talk of the actual holiday or travel costs, but this gives you a good starting point to then check exchange rates to see if the cheaper holiday can be combined with your travel money going further. Basically, you want to make good use about the ‘native’ news sources and resources for research on your holiday destination.
4. Learn Forex
Forex – Foreign Exchange – is a way to invest in currency movements. You may not wish to actually do this but what you will gain is a knowledge of how currencies perform ‘against’ each other. By gaining a familiarity with the way currency behaves in the markets like this, it can help you get a feel for when exchange rates change and which currencies will gain or lose.
5. Associated costs
Link your ‘currency research’ to the way – or ways – you’ll actually be acquiring it. For example, if you decide to take a fairly high amount of foreign currency as cash with you as opposed to using a card, check where you’ll get it from. What’s their actual exchange rate compared to the one you’re working from? Do they charge a commission? If not, the exchange rate may not be as attractive in order to compensate for this.
If using credit cards, check the rates of interest on these and any other costs such as ‘loading’ fees or foreign exchange fees. Exchange rates are often attractive on credit cards due to the issuer’s bargaining power.
Knowledge is key
Researching currency may seem a bit extreme and, compared to poring over travel brochures and websites, a bit dry but it’s capable of saving you significant sums if you get it right.