# US dollar conversion



## AMABILE (Apr 3, 2009)

my friend just sold a property in florida at a loss
she wants to know when to convert her US 100K
into canadian dollars NOW or WAIT ?


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## avrex (Nov 14, 2010)

<another currency market timing thread> ....sigh.


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## avrex (Nov 14, 2010)

I'm assuming that your friend wants to convert her newly acquired US dollars back into Cdn dollars.

The answer is....... nobody knows for sure which way the currency markets will go. i.e. market timing risk.

If she needs those Cdn dollars now, she should convert now.


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## Synergy (Mar 18, 2013)

I agree with avrex. It's a coin toss, your guess is as good as mine type of thing. To appease the speculators, here's an opinion from Bruce Campbell (BNN - May 1, 2015):



> Cdn$? The oil prices back to $58-$59 help. It has been higher lately and most currencies are higher against the US$. He doesn’t think oil prices go immediately to $70, so this is kind of petering out. As soon as you get stronger US economic numbers, probably over the next 6 months, he expects the US dollar to reassert itself. The trading range is something like $78-$84, and we are near the top of the range


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## Moneytoo (Mar 26, 2014)

I would wait (as I believe the chances are high for CAD to go back to under 80 cents or lower in the near future), or at least sell in bulks - half or third now, the rest later. I did five Norbert's Gambits converting CAD to USD isince last spring, and waiting usually worked better for me (as technical analysts would say, "what goes up must come down" - and vice versa )


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## RBull (Jan 20, 2013)

Pretty hard to provide a straight answer since there are many factors we don't know about your friends situation, and future rate direction isn't able to be predicted by anyone with a good degree of accuracy.


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## gardner (Feb 13, 2014)

I would also ask what she intends to do with the $CAN. Is it going to pay down a mortgage or some other specific purpose? The timing and urgency of the use the money is to be put to will drive some of the decision.

If doing a cash-to-cash conversion is the thing, then my inclination would be to dollar-cost-average the conversion by doing it in blocks of $25K or $50K and space out the transactions. Use a "norbert gambit" for the conversion to avoid foreign exchange fees, which will be terrible -- 1.5% or worse if you just ask a bank to convert it, even for 250K.

Many people like to invest a portion of their portfolio in $US. It is possible that your friend would consider hanging onto a portion of the $US as part of an investment portfolio.


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## AMABILE (Apr 3, 2009)

she doesn't need the money---just a cash to cash conversion
it's sitting in a us account with cibc --- here in toronto
she has no investment knowledge- no brokerage account
how can she avoid the the foreign exchange fee?


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## gardner (Feb 13, 2014)

The most efficient way to convert $US to $CAN requires a brokerage account that handles both $US and $CAN. The method is called a "Norbert Gambit" and there are detailed instructions on this forum and that Google will find you elsewhere. This type of conversion will give you close to the spot rate -- within a few tenths of a percent.

The next best, and less onerous way, is probably to use a specialty currency exchange. Phone around and ask how it works. The one I use is on Ottawa and will quote you a rate on the phone and hold it for you for an hour. This is long enough to get to the bank, get a draft drawn up and run over to the currency exchange. They write me a cheque for the C$ amount and I go put that in my account. The rate spread is something like 0.75%

The most expensive way is to tell the bank to make it be $CAN now, and they will take 1.5% off the top, or more.

In any case, ask questions. Larger amounts get better rates, so make sure you understand the details. Try to negotiate a spread to use with the bank. With TD, I know this works for branches that are side-by-side with a currency trader.

And seriously, consider what the money is to be used for. If it will become retirement savings, then why not make part of that savings be things in $US like $US mutual funds and so forth? Your friend is quite likely to wind up holding that sort of thing in retirement savings eventually anyhow.

Also, it is possible to earn 0.75% to 2.0% on $US savings at Tangerine. There's no need to accept the measly 0.15% that CIBC pays.


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## pooja.majorgainz (Apr 7, 2015)

gardner said:


> The most efficient way to convert $US to $CAN requires a brokerage account that handles both $US and $CAN. The method is called a "Norbert Gambit" and there are detailed instructions on this forum and that Google will find you elsewhere. This type of conversion will give you close to the spot rate -- within a few tenths of a percent.
> 
> The next best, and less onerous way, is probably to use a specialty currency exchange. Phone around and ask how it works. The one I use is on Ottawa and will quote you a rate on the phone and hold it for you for an hour. This is long enough to get to the bank, get a draft drawn up and run over to the currency exchange. They write me a cheque for the C$ amount and I go put that in my account. The rate spread is something like 0.75%
> 
> ...


Not a bad idea
Nice one!


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## smihaila (Apr 6, 2009)

gardner said:


> Also, it is possible to earn 0.75% to 2.0% on $US savings at Tangerine.


Where, where!? According to this page, the current interest rate offered is a measly 0.25%:
https://www.tangerine.ca/en/saving/savings-accounts/us-savings-account/index.html


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## gardner (Feb 13, 2014)

GICs and TDs. Arguably not "savings".


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