What You Need to Know about Foreign Currency Exchange.
Have you ever wondered why currency values change according to the country? Why do I have more money in one country and less in another? Who determines these rates we all trade with? This beginner’s guide is here to simplify the complexities of currency exchange. We live in a global village where economies are now interconnected significantly. Understanding currency exchange is vital for both individuals and businesses that play in the international arena. Having a good knowledge of the fundamentals of currency exchange is essential, whether you’re planning to study abroad, go on vacation or take an international trip, make investments outside your country, or conduct business transactions across borders.
Foreign currency exchange generally involves the conversion of one country’s currency into another. In other words, it is the bartering of one currency with another currency at an agreed conversion factor, generally referred to as ‘Exchange Rate’. The exchange rates determine the value of one currency relative to another and these rates fluctuate with time.
Top Questions and Answers about Exchange Rates:
Q: Who fixes these exchange rates?
A: Exchange rates are generally fixed by the Seller, Buyer, or Government. However, in a truly free market economy, it is fixed by the Buyer and Seller. That is what is called agreed rates. On the FSGX platform, we allow sellers and buyers to fix their own rates and change them at will.
Q: What influences the change in exchange rates?
A: Exchange Rates are influenced by several factors, mainly economic and market forces of demand and supply. In both Canada and Nigeria, Central Banks influence exchange rates through monetary policies. FSG Xchange Inc is registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a Money Service Business. (link to the About Us page here)
Q: Why do these exchange rates fluctuate?
A: Exchange rates fluctuate because of changes in economic indicators and market sentiments. Strong economic performance generally leads to currency appreciation, while weak indicators may result in depreciation. For example, if buyers favour a particular currency over another, for many reasons, the increase in demand for the favoured currency can potentially drive up its price.
Tips for making Profitable Currency Exhanges
Exchanging currencies is fraught with challenges and could be expensive. For those dealing with CAD and NGN exchanges, the challenges are currently even more compounded. Some practical tips to navigate the process effectively include;
- Rates comparison before making a buying or selling decision
- Trust your instincts and time your purchase to just the right time.
- Look for the fine print and hidden fees.
- Be aware of the overall market situation.
With a view to ameliorate challenges associated with Canadian Dollar and Nigerian Naira exchanges, we at FSG Xchange have created an online marketplace for peer-to-peer operators to buy and sell Canadian Dollars and Nigerian Naira. We give the needed support to high number of Nigerian-Canadians providing financial support to their families back home and also to many Nigerian students in Canada who are been supported by their families in Nigeria.
Currency movement between Canada and Nigeria is fundamental in enhancing economic and social lives in both countries. Having a good understanding of how it works and taking advantage of available opportunities will save you money, time and hassles. Click to sign up to the FSG Xchange peer-to-peer platform today.