Converting AUD to USD Cheapest Options? Brokerage Vs TransferWise, etc

Given the recent strong AUD:USD, I want to convert A$50-100k to USD. I also have a Interactive Brokers trading account from which I trade US shares very occasionally. I will be holding the roughly USD$70k in cash in case there are US shares to buy, otherwise I just keep it in cash as an emergency fund.

Is it cheaper to convert my AUD to USD within my Interactive Brokers trading account, or would I get a more favourable exchange rate with Transferwise/Ozforex?

Comments

  • Following too. I would just want to get 5k or thereabouts to prepay spending money for when we can travel again.

  • Transferwise is the safest option I know. You can get the exchange rate and fees directly on their site…

  • Is it cheaper to convert my AUD to USD within my Interactive Brokers trading account, or would I get a more favourable exchange rate with Transferwise/Ozforex?

    IB gives you a great rate. You'll see it's better than Transferwise.
    You can easily test it, go to convert AUD to USD in IB, and it will tell you how much USD it will give you. Then do the same in the Transferwise calculator.

    • Do you do this yourself? I was wondering why more people wouldn't use IB as a foreign currency exchange rather than Transferwise. Any downsides to using IB? Thanks

      • yeah downsides to IB is the $10 USD inactivity fee if you don't use the account.
        If someone already has an IB account it is great to use it for converting currencies like you are talking about. I probably wouldn't sign up to IB purely for that purpose though.

        I use my IB account daily so am regularly converting funds there.

        If you want your account open to trade shares occasionally, you may as well make use of it :)

  • I would be closely following the US third stimulus money printing. The AUD might have some way to go yet.

    • When are the US Feds money printers due to come into effect?

      I don't think the RBA will allow the AUD to breach 0.8 though, they might think it'll be bad for a commodiity export-based economy like ours.

      • They don't really have an option to suppress it to below 80c.

      • According to this ABC article ANZ analysts are forecasting Aussie$ up to US$ 0.82 by end of 2021

        • ANZ "analysts" like all the rest have no idea, rather they just make some predictions based on expectations - which seldom pan out.
          Do some research and you will see only 6 months ago they were all doom and gloom with the Aussie down at the mid to high 60's by the end of 2020

      • The RBA will have no choice as they cannot control the exchange rate. These days you have the mega punters running possies of A$5-10 bio.

        • Although the RBA can influence the exchange rate. They have an idea as to what a fair rate should be given economic conditions and how they want the economy to go and then trade AU$ or US$ to steer the exchange rate in that direction. So if they think the AU$ is too low, they can buy AU and sell US and if they think AU is too high, they sell AU and buy US. They also turn a good profit as a side effect.