If you are looking to exchange currency between Australian dollars and the Singapore dollar, or vice versa, then you will want to know how to obtain the best exchange rate. Many factors affect exchange rates, and so in terms of timing the exchange, where possible, it is important to know these.
So, we will think about aud to sgp, while at the same time thinking about other factors that might stop us from achieving the best currency deal possible.
Comparing Australia and Singapore
Australia is considered to be 18.4% more expensive than Singapore in terms of the cost of spending. So, it is perhaps more vital that any currency exchange preferences than those needing more spending money. However, nobody wants to think that their money will be worth less than it should have been due to a poor currency exchange. So, it is important to shop around or grab a good deal with both hands when it makes the most of your money.
Reasons for Differences in Currency Rates
The factors that will influence currency rates include inflation, interest rates, and public debt. Also, the economic health and political stability of a country. Its balance of trade will also factor in. This is the difference between its imports and exports. A lack of confidence and mere speculation can affect the trading in currencies. This will all impact traders, businesses, and holidaymakers wanting to exchange currencies the world over.
How Can We Ensure the Best Rates?
Seeking out the best currency rates is not only about knowing who is offering currency exchange but following the trends in rates. To keep an eye on these in real-time is the best method, but at the very least, plotting how certain rates have changed in both the short and the long term. This allows for more accurate predictions to be made as to when to exchange currency in the future. The pandemic has, of course, had an impact on economies and so currency rates, and who could have predicted that? So, we must only use past currency movements as a guide.
Facts About Currency Exchange
It does not hurt to know some terminology when trading in foreign currencies, and there is none funnier sounding than the nicknames given to currency exchange traders. They are known as “bull and bear”. The bulls are the optimistic traders who think foreign exchange prices will rise at a certain time, whilst the bears expect exchange rates to drop in the future. These nicknames originate from how certain animals behave. That is, bulls push their horns upwards to strike, while bears slash their claws downwards. “Pigs” is rather interestingly used to refer to traders who just do not know what will happen next. Currency rates do, after all, suffer from volatility as much as they can become stable for a while, with just small changes noticed. It is for us to keep an eye on them and become an altogether different animal that strikes a happy medium.
You may have heard of the term “spot rate”. Well, this is an asset’s current market value available for immediate delivery upon a quote. It is useful to know that one.
In terms of its history, the foreign exchange market, known as Forex or FX, was formed in 1971. This was when US dollars were no longer exchanged for or backed by gold.
Talking of history, it is, of course, important to know the history of the exchange rates too, as it provides the clue to future movements. Then, apart from global exchange rates, it is necessary to know that some companies offer more competitive rates than others.
Finally, there is no doubt that the internet has made foreign currency exchange easier than it used to be. We no longer, for instance, have to visit offices to make the exchange. Also, many traders now operate on a 24-hour basis, allowing us to make an exchange of currency at a time that should prove beneficial financially.