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Currency conversion
Old 04-10-2007, 12:30 PM   #1
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Currency conversion

I have about 40,000 british pounds in a brokerage account and I'm trying to figure out the best / cheapest way to convert that to US dollars. Calling my current broker and bank it looks like I could pay a fee of around 1% (in one case), or I can pay a spread, which also turns out to be around 1% in the other. There must be a cheaper way. Any advice?
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Re: Currency conversion
Old 04-10-2007, 01:13 PM   #2
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Re: Currency conversion

I've used HSBC to buy sterling to make voluntary class 3 National insurance contributions from the States. I've found them to be the most economical since they are based in London. However that being said I have not found a cheap way to do it. HSBC rates are approximately $0.08 per pound to go either way. That is above the currency rate you will find in the WSJ. They also tack on a flat fee of $25.
Thomas Cook costs more.
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Re: Currency conversion
Old 04-10-2007, 01:47 PM   #3
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Re: Currency conversion

Not sure if your brokerage account offers wire transfer facilities, but if it does, you might want to look into

I've used them for several transactions, reliable and also decent rates.

I will say, though, that for large transfers I've found that the banks offer a pretty good deal. You have to phone them up and ask for the commercial wholesale rate. This applies in either direction. So if you have a UK bank account that might be another way to go.

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Re: Currency conversion
Old 04-10-2007, 02:10 PM   #4
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Re: Currency conversion

Interactive Brokers has a very small spread on currency pairs. Currently, it's at

GBP-USD Bid 1.97145 Ask 1.97150

They also charge a fee of .2 BP with a minimum of $2.50.

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Re: Currency conversion
Old 04-12-2007, 11:56 AM   #5
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Re: Currency conversion

Interactive Brokers appears to blow everyone else out of the water with a spread of about 0.01%. If I was going to do this a lot I'd have to go there. For this one trade, though, it looks to be very complicated to set up a new account, and quite a few fees to close it again, so I will probably just pay. Even, which is quite a bit lower than others, has a >1% spread at this trade size. I don't understand how I can trade Intel with a 0.05% spread, but two of the worlds biggest currencies have a spread at least 10 times that almost everywhere you look!

Thanks for the infomration all. I'm surprized more ex-pat RE's haven't found a cheap way to do this.
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