Tip 96: Best places to exchange currencies

The best places to exchange foreign currencies are at places where negotiation is allowed. That is because the spread between Buy and Sell for each currency is usually huge and some traders usually would agree to reducing the spread if they are fond of certain currencies. The banks however do not have time to monitor the flunctuations of each currency and decides to increase the spread and transaction cost and pass it over to the customers to bear. So far, I have found Hong Kong to have the best values when you exchange your currency, while Japan and Hawaii to be places where you have to pay more to exchange your currencies. In Tokyo, there are practically no opportunistic traders who would want to make gains trading currencies, besides the fact that Japanese people trust only the banks with their money. The one place I know that offers the best value in Tokyo is at the New Shinbashi building (near the Shinbashi JR train station) where there are plenty of travel agencies arranging travels for tourists and they ended up with a side business of exchanging currencies for these tourists. Though, you can not negotiate the rates with the Japanese. This is the only place in Tokyo that I know of that offers slightly better rates than the banks. In Hong Kong, you can practically find an exchange booth at most street corners and its actually safer to do your transactions as crime rate and theft is lower in Hong Kong than Kuala Lumpur. It may seem trivial, but currency exchange can be quite a substantial cost when you are relocating to another country or having a work assignment of more than 1 month. This is especially so when the volatility of currencies are almost at the highest in this decade currently. The best rates are at money changer booths at Chung King mansion close to Tsim Sha Tsui, Kowloon. Though, I found recently that HSBC bank in Hong Kong (not Tokyo) offers very competitive rates without the need for negotiation. You will need to conduct the exchange then deposit into a foreign currency exchange account and can make a request to withdraw it on the spot. If they do not have sufficient currencies in stock, HSBC only require 3 hours to prepare the requested amount at the branch of your request.
















So far, the Japanese Yen is edging higher and higher as traders decide to unwind their carry trades and sell their foreign investments and bring back the yen to Japan. Other investors seeing this trend also stock up on their yen, knowing that it would be a safe haven currency given the conservative nature of Japanese banks keeping high reserves. Its anybody's guess how long this would last but one sure way is to exchange your currencies in stages instead of doing a 1 time lump sum exchange. It helps when you are constantly monitoring the rates to know whether its at a ceiling price or a bottom price. Of course, if its at a historically low price for a few years, chances are you would not be at such a disadvantage to exchange more of your currencies. An example would be the USD/JPY that has increased to a 13 year low and AUD/JPY at a 6 year low and GBP/JPY at an 8 year low. Hence, the closer you monitor these currencies and do a stage by stage exchange, the more you stand to gain/less you stand to lose. I would have brought more yen out of Japan if not for the need to pay for my home mortgage. Anyway, its good to feel at home eating breakfast this morning - century egg porridge and fried Loh See Fun for a total of HKD13 (USD$1.60). Its been a long time since I would spend on breakfast compared to when I was in Tokyo, but seeing the old Cantonese ladies cook a good meal just makes me feel like spending. Nothing beats old style hawker food versus the premium priced restaurants.





























(Photos: Top - two currency exchange shops at Wanchai, Hong Kong.
Middle - New Shinbashi Building, the best place to exchange currency in Tokyo.
Bottom - my breakfast at a hawker food joint.)

Tip 100 coming up ... the post with prizes ... keep tuning into my blog.