Manage currency risk at home
Avoid buying high-priced goods made abroad or, if possible, wait for the Canadian dollar to rise to do so.
Buy local produce if possible, especially seasonal vegetables and fruits.
Like your grandma and fill your freezer when the food is fresh and cheap.
If you plan to spend a lot of time in a foreign country (like us, since our two children live in Britain and our first grandchild will be born Scottish), consider opening currency savings or investment account. From this country.
Manage currency risk when planning a trip
It is essential to take out travel insurance for medical expenses. According to the guarantee, this insurance not only covers the cost of emergency medical care, but it also protects you against a sharp rise in exchange rates which could increase the cost of treatment obtained abroad – and you pay the premium in Canadian dollars.
Feel free to “shop around” for your exchange rate. Most banks charge a service fee; ask your bank to waive it. The rates charged by exchange offices located in shopping centres can be exorbitant, but those offered by online exchange services (such as Knightsbridge) can be attractive.
Buy your currencies when rates are low rather than just before you leave. The principle is the same as dollar-cost averaging: you buy some of the money you’ll need when rates are low, then buy more when you see them come down.
Check exchange rates on the web or install an app on your smartphone.
Even if you’ve visited a country before, don’t assume that the exchange rate is always the same. The Bank of Canada’s Currency Converter – Ten Years tool will show how the currency has changed since your last visit.
When you book a cruise, excursion, hotel room or another service, pay the total price if the exchange rate is low and only the deposit if it is high.
Be careful not to store too much currency, as government policy may change. For example, the Bank of England has decided to replace its £5 banknotes with polymer notes, and the old ones have not been legal tender since May 2017.
Manage currency risk while travelling
Use one of the many mobile phone currency converter apps to make informed buying decisions. Is a $15 US scarf a bargain? Are you ready to pay £5 for a coffee?
If you have currency left over at the end of your trip, consider donating your coins and tickets to charity (some airports and airlines offer this option) or putting them on an issued prepaid card by a retailer (for example, Starbucks) that you can also use in Canada.
