The foreign exchange (FX) market isn’t like other markets. For starters, it never closes, operating around the clock on weekdays. Also unlike stock markets, it doesn’t operate in a particular place: It’s decentralized and truly global. Whether you’re a vacationer converting currency in an airport or a trader angling to profit off of intra-day price fluctuations, you are using the FX market.
No surprise, then, that the FX market is the world’s largest and most liquid market. As of 2019, the value of daily trading had reached $6.6 trillion—likely higher now, two years later. Advancing technology (e.g., high-frequency algorithmic trading) and real-time online trading are contributing to an ever-growing FX transaction volume and number of retail traders.
For businesses buying and selling various currencies to make cross-border payments around the world, there are two big takeaways from all this. The FX market is highly dynamic—more so than stock markets. Given that, it pays to have a true expert in your corner getting the best possible rate at any given moment.
FX Rates 101
But wait: Aren’t currency prices the same at any given moment in time, across the market? Many people don’t realize that there are no standard rates across the FX market. Bank of America might offer a slightly different EUR/USD rate than Chase or Wells Fargo, for example. That’s why it pays to turn to Tempus to secure the most competitive currency price possible at any given moment.
As a specialist firm that only offers foreign exchange and international payment services, TEMPUS is laser-focused on providing exceptional value and prices. That includes our exchange rates. We offer more than 130 currencies to meet clients’ global payment needs, and our prices are often more competitive than what a typical bank and other international payment providers offer.
How do we consistently offer highly competitive prices? To answer that question, it helps to unpack what factors contribute to prices. The biggest factor, of course, is the FX rate available at any given moment on the open market. These rates directly react to global supply and demand for a particular currency, which in turn are influenced by things like interest and inflation rates, money supply, financial stability and geopolitical events.
But currency prices aren’t built on FX rates alone. It’s important to check the total cost of a currency offered by a bank or other seller, which may include commission rates, currency conversion fees and other administrative markups. These factors are often in play and can account for price differentials between sellers, especially large multinational retail banks and speciality firms like TEMPUS.
Unlike Chase or Bank of America, TEMPUS doesn’t have retail branches across the country. Our firm is focused on FX markets and global payments, avoiding high overhead costs—which translates into more competitive currency prices for you.
Sure, you could turn to your bank for your FX needs. But they probably aren’t offering the most competitive rates—and they might be outsourcing parts of their foreign exchange business to specialists as the FX market continues to heat up due to electronic and algorithmic trading.
At Monex, we view having the most competitive currency prices as a core competency. But we also know that successfully navigating the FX world involves more than just securing the best prices. Ultimately, the ability to swiftly manage FX volatility affords higher returns to our clients, who benefit from proactive customer service—account managers who flag threats to profit margins and opportunities to save money. Transaction delivery speeds matter as well.
On all those fronts, TEMPUS has got you covered.
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