Frequently Asked Questions
What is foreign exchange?
The foreign currency exchange market is the largest financial market in the world. Every day over $ 1.7 trillion dollars in currency are traded through the foreign exchange markets. Foreign Exchange is the act of exchanging legal tender of one country for another. The two main types of transactions are:
- Buy - Buying a foreign currency
- Sell - Selling a foreign currency
MoneyWay offers Best Rates for Buying or Selling currencies
What is a foreign Exchange rate?
The price relationship between two currencies. This relationship is determined by the forces of supply and demand.
What is dollar value?
The amount of lawful currency of a country which at any moment in time would be generated by the conversion of the relevant foreign currency into another currency at the then prevailing exchange rates for buying and selling such currency.
Why are the rates posted by MoneyWay Currency Exchange, different than those published in the financial papers?
For our corporate clients, the rates we quote are volume driven, this means that the larger the transaction, the better the rate.
How can MoneyWay Currency Exchange provide better rates than those offered at my financial institution?
At MoneyWay, our exclusive focus is FX. For major financial institutions, FX is only one of many services offered. Banks set their rates once daily; because our rates are based on real time pricing we are able to undercut the posted rates.
Will my relationship with MWCE affect my current banking relationships?
No. All transactions performed by MoneyWay are completely independent of any established banking relationships.
At MWCE you are assured of complete privacy and security for all transactions. We value our clients, and we do not share our client list or information with anyone.
What is a Spot Contract?
A Spot Contract is a foreign exchange purchase or trade. The rate is based upon the spot rate at the time of purchase. This rate is fixed and is usually settled at the close of the trading day, or within two business days. Sometimes this is also known as booking at a fixed rate. Once a spot transaction is booked, it must be settled.
What is a Forward Contract?
The purchase of a forward contract is an agreement to buy or sell currencies (for settlement up to a year in the future) at predetermined exchange rates. This is used when a client wants to reduce currency fluctuation risk on accounts payable when dealing with foreign suppliers. Forward contracts require a percentage deposit to initiate.
What is a draft?
A draft is a guaranteed cheque. They can be issued in all major currencies. A draft must be physically transferred and difficulties may arise when cashing them in countries that are politically unstable. Drafts are less expensive than sending a wire.
What is an electronic fund transfer (EFT) or wire?
EFTs are the electronic fund transfer from one bank to another. Although sending a wire is slightly more costly than sending a draft, the benefits often outweigh the extra costs. The advantages of EFTS are as follows:
More secure than cash or drafts
The receiving bank does not put a hold on EFTs
Faster than physical means of transfer
Can an EFT be recalled?
No, once an EFT has been initiated it is guaranteed to the designated receiver. However, if the account information or beneficiary information is incongruent or incorrect an EFT can be recalled. This process may take up to a month.
Can I receive a hard copy confirmation of an EFT?
The financial institution that initiated the transaction supplies the hard copy confirmation. This is usually provided the same day or by the next banking day.
What is a spot transaction?
A spot transaction is an agreement to buy or sell at the current rate at a given time.
What is an overnight bid?
It is possible to achieve a desired quote or profit rate by taking advantage of swings in the currency markets overnight. This process is called an overnight bid and allows the client to buy below the spot rate or at a rate or range specified by the client.
Is there an advantage to buying or selling on a particular day?
The international currency market operates around the clock; therefore there is no particular advantage to buying or selling on a given day.
How are currency values affected by interest rates?
Foreign investors rely on higher interest rates for higher rates of return. The resulting investment or lack thereof, affects the flow of money in and out of a country and the value of its currency.
What is the Euro Zone?
The Euro Zone consists of 17 countries that have harmonized their currencies into a single currency - the Euro. These countries still have separate sovereignties, but they have a combined central bank (EBC) that determines economic policy issues. The countries that form the Euro Zone are:
How can counterfeit money be detected?
To recognize counterfeit money it is necessary to know the security features found in real money. You cannot rely on "anti-counterfeit sensors" that recognize certain elements in the ink. Counterfeiters may add the same elements foiling the device. When examining currency, look for the differences - not the similarities.
Some security features to look for are:
Paper quality Planchettes
little paper or metal disks, they can be flaked off with a pin.
Embedded wire or plastic threads Segmented wire Invisible printing Optical devices Raised marks - high relief marks help blind people recognize different denominations.
Watermarks - legends or figures visible when the note is held against the light Holograms - silvery designs applied to the note Micro lettering - appears solid to the naked eye, but can be read under magnification Perfect register - When seen through light, both sides of a design match exactly Serial numbers cannot be relied upon to verify currency because they change to often to be reliable If at any time you are in doubt as the legitimacy of a note do not hesitate to contact your local law enforcement agency.