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Old 10-19-2017, 05:33 PM   #1
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Exchange Rate - help

Got a quick question... Escape received funds from me yesterday (10/18) for a trailer that I am picking up in early November. All of the exchanges that I can see tell me that yesterday's rate closed at $1.246. Escape is telling me that they are giving me $1.225 , and that I am looking at the stock exchange rate. I'm looking at FX rates and have no idea where they are coming up with $1.22.... That is a big discrepancy- any thoughts?

Thanks!
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Old 10-19-2017, 05:38 PM   #2
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Their bank gave them the rate, they don't get to "set the rate".. foreign currency exchange is like this.. the only way you can be sure the exchange rate is what you intended to be, is to do the exchange yourself and wire them Canadian funds.
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Old 10-19-2017, 05:38 PM   #3
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They get what they get at their bank.
You can use web numbers as a reference, but not as an absolute.
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Old 10-19-2017, 05:40 PM   #4
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Got it- thanks. I probably should have looked into getting the money exchanged myself for that type of variance.
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Old 10-19-2017, 05:45 PM   #5
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ETI directed me to vancity.com for current rates. Click on Rates and then foreign currency. You will see the spread on the buy and sell costs for USD. If you are buying USD the rate is 1.27. If you are selling USD, which you are doing, the rate is 1.22.
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Old 10-19-2017, 05:48 PM   #6
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I would not make the assumption that if taking care of it some other way, one would get better rates. You can also get worse rates.
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Old 10-19-2017, 07:42 PM   #7
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So, how much did that $.02 variance cost you? In the grand scheme of things you will recapture it later if you ever sell the trailer.
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Old 10-19-2017, 08:02 PM   #8
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Not sure how much Dave was transferring, but if I calculated it right, 2 cents on the dollar difference over $25,000 is $500 difference. That sounds like real money, to me....
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Old 10-19-2017, 08:14 PM   #9
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Like Glenn said, Escape has no control over the exchange rate, their bank does. That is why there have been several thread about the various methods many of us used to get better rates.
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Old 10-19-2017, 08:56 PM   #10
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Did anyone who opened special accounts look at what they saved over what Escape was using on the days around when they paid? Do you know what you saved?
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Old 10-19-2017, 09:35 PM   #11
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Quote:
Originally Posted by davedru View Post
All of the exchanges that I can see tell me that yesterday's rate closed at $1.246. Escape is telling me that they are giving me $1.225 , and that I am looking at the stock exchange rate. I'm looking at FX rates and have no idea where they are coming up with $1.22....
Quote:
Originally Posted by stephen99 View Post
ETI directed me to vancity.com for current rates. Click on Rates and then foreign currency. You will see the spread on the buy and sell costs for USD. If you are buying USD the rate is 1.27. If you are selling USD, which you are doing, the rate is 1.22.
The rate Dave found was essentially the same as OandA lists for October 18th (1.2494). Notice that this is midway between the buy and sell rates from VanCity, because that's how this works: the bank's income comes from the margin between the rates (plus any other fees).

The rate from the exchange website (of 1.2494) is described by OandA as an "interbank" rate, and advises:
Quote:
Choose a percentage from the interbank rate list to better approximate the tourist exchange rates actually charged by your financial institution.
They further explain:
Quote:
Interbank rates (+/- 0%), with a margin close to zero, are the "official" rates quoted in media such as The Wall Street Journal. They typically reflect the market rates for large transactions of US $1 million or more when banks trade between themselves or with their very large clients.

For the smaller amounts exchanged in a retail setting, banks, credit cards and exchange agencies charge commissions to convert currencies. These retail rates add commissions of 1 to 10 percent or more.
The purchase of an Escape is not a million-dollar transaction, and neither Escape nor the buyer is a bank or a very large client. In this case, a 2% to 3% margin seems pretty reasonable to me.
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Old 10-20-2017, 08:57 AM   #12
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That's how banks make money on the transaction without charging "fees" ...
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