Dollars to Euros for New Boat Purchase

[SV-Viento]

We will need to exchange dollars for euros and transfer several payment tranches from US to EU. It appears most large US banks, including ours, have limited services for these transactions. Ideally we would like to purchase and hold Euros when we feel rates are beneficial and hold in a multi currency or euro account and make payments as required. Curious how others have tackled this?
Kind regards SV Viento

[dfelsent]

I used transferwise several years ago for a used boat, dollars to pounds.
I agree you need to find a specialist bank.
Some yacht projects may heave ideas.
For the large sums involved getting a lousy exchange rate is very expensive.

[SV-Viento]

Originally Posted by dfelsent

I used transferwise several years ago for a used boat, dollars to pounds.
I agree you need to find a specialist bank.
Some yacht projects may heave ideas.
For the large sums involved getting a lousy exchange rate is very expensive.

Thanks and your hitting on our thoughts so far - I’m not smart enough to play the FX game but can at least dollar cost average the exchange over a period of time to minimize the exchange cost.

We are looking at transferwise. Only downside is that once the exchange is made it is our understanding the euros will be held in a bank in an EU bank which we will have few protections as non eu citizens.

[etoimene]

Maybe oanda.com could work. I remember they had some currency transfers.
I see now they partnered with Transferwise for money transfers. They used to offer their own wallet.

Any FX broker will allow you to open multiple currencies accounts and exchange will have very good rates.

Problem is finding good one that you can trust and have money safe there.

Alternatively, you could place margined FX transactions, without depositing a lot of money with the broker.

[SV-Viento]

Originally Posted by etoimene

Maybe oanda.com could work. I remember they had some currency transfers.
I see now they partnered with Transferwise for money transfers. They used to offer their own wallet.

Any FX broker will allow you to open multiple currencies accounts and exchange will have very good rates.

Problem is finding good one that you can trust and have money safe there.

Alternatively, you could place margined FX transactions, without depositing a lot of money with the broker.

Thanks - exploring this a bit but feels slightly out of our wheelhouse. That noted we will continue to explore. We have time but dollar looks to be headed in wrong direction so we are exploring all options to mitigate.

[goboatingnow]

In the past doing this the other way the FX dept of my bank would let me buy forward and lock in an agreed rate. Money would then change hands as required

[etoimene]

Bank FX forward contracts are very expensive, compared to the same thing with FX broker.

[Stewie12]

Try XE.com They will cut your costs.

[Symphony]

use a crypto account. international transactions cost tenths of a penny.
change $USD to a stable coin, or to a low volatility currency like Algorand or Compound or Tezos. Lightcoin is good too. of course there's Bitcoin and Ether but they are volatile at this time (but not as volatile as the stock market!)

These coins are made for financial transactions fast and cheap. I'd never use a wire transfer or bank contract again.
Once you have enough crypto, you can exchange it for Euro, then pay your bills.
Coinbase is the largest exchange and licensed as a broker dealer in most countries and states.

Richard
Vicem 58 Classic (for sale)
Branford, CT

[northwestsailor]

I have used XE with little issues. I now use Transferwise and regularly buy Euros and NOKS when rates are better. With their debit card you can use it throughout Europe whereas getting a European bank card would be difficult and time consuming at best.

[KompetentKrew]

Fineco Bank offer a multicurrency account, and very fair exchange rates, if you're UK or EU resident.

[Gaia]

Originally Posted by Symphony

use a crypto account. international transactions cost tenths of a penny.
change $USD to a stable coin, or to a low volatility currency like Algorand or Compound or Tezos. Lightcoin is good too. of course there's Bitcoin and Ether but they are volatile at this time (but not as volatile as the stock market!)

These coins are made for financial transactions fast and cheap. I'd never use a wire transfer or bank contract again.
Once you have enough crypto, you can exchange it for Euro, then pay your bills.
Coinbase is the largest exchange and licensed as a broker dealer in most countries and states.

Richard
Vicem 58 Classic (for sale)
Branford, CT

Bitcoin less volatile than say the Dow?

[etoimene]

Originally Posted by SV-Viento

Only downside is that once the exchange is made it is our understanding the euros will be held in a bank in an EU bank which we will have few protections as non eu citizens.

XE.com and Transferwise are thin in this area.

ANY Coin introduces even more exchange rate risk. It might be good instrument for money transfer (with low volatile ones as someone suggested above), but I did not go into that.

I finally have decent keyboard so I'll try to explain how to do it with FX broker, by keeping most of the money at your local trusted bank.

All FX brokers offer margin trade. We in EU can get up to 1:30, and I have seen brokers offering up to 1:500.

What does that mean?
Eg. with 1:100 margin you can control 100.000 with 1.000.

So, for each 100k that you plan to spend, you deposit 1.000 with FX broker.
If you hold USD, and have to pay in EUR, and expect EUR to gain, you buy one standard lot of EURUSD, for which you will have just enough margin.

If EUR continues to move UP, your FX account will gain and you will make up for unfavorable exchange rate.
If EUR decides to move down, you will LOOSE at FX account, but your bank deposit will become more valuable in EUR terms.

This is called hedge. You are taking out the currency risk.
You will have to pay some small exchange rate difference (conversion) but that is typically 150 times less then with a bank (0.0002 - 2 pips is common) and swap (difference between currency interest rates applied to amount that broker actually "lends" you through margin )

I don't know how to choose FX broker since you are US based and most of the brokers I know don't take US customers because of FATCA.

I would try with
https://www.dukascopy.com/swiss/english/forex/trading/
and
https://www.oanda.com/apply/?cc=US.

Disclaimer: I am not financial advisor, so now just scratch all the above!!!

Of course, the most difficult question is weather this is worth and will EUR continue to grow. You obviously think it will.

[valhalla360]

Is there a reason for doing it over several transactions (other than trying to average out the exchange rate over time)?

Trying to guess the exchange rate movement seems silly unless you have some inside knowledge or reason to expect a big move, there isn't much point. (if you have inside knowledge, I'm betting you wouldn't be asking the question in the first place)

I could see a deposit and then final payment as separate transactions but doing 8-10 transactions will likely eat up any savings with transaction costs.

We just had our bank (actually credit union) do the transfer. It was a $50 flat fee.

If it's with a dealer, could you get them to price it in dollars and they take the exchange rate risk?

[etoimene]

Originally Posted by valhalla360

Trying to guess the exchange rate movement seems silly unless you have some inside knowledge or reason to expect a big move,

I think the same.