Buying USD In Canada: When’s The Best Time?

Regardless of intention, every individual or business that is highly attentive to their finances will strive towards getting an optimal exchange rate. Although that’s definitely a worthwhile goal, even the best foreign exchange speculators in the world will tell you that perfect currency conversion timing is virtually impossible – you’d have to get really lucky.

However, there are a few tips and tricks you can leverage to try and get the most value out of your transaction. We’ve compiled a few of them in this article to help you save money in regards to converting USD from CAD.

THE BEST STRATEGIES TO USE WHEN CONVERTING BETWEEN DOLLARS

For CAD-to-USD Use The “First Day Of The Month” Principle

This strategy assumes that you are a Canadian resident with some or most of your finances recorded in Canadian dollars. If you have any sort of upcoming bills in foreign currencies that are paid monthly, for example a service charge payable in US dollars, you’d need to exchange your Canadian dollars for the proper currency. One of the best strategies you can use when timing currency conversions is to simply book an exchange on the first business day of the month. Since so many businesses need to transfer money every month in order to make timely payments, it works best to just follow the crowd.

“Last Day Of The Month” Principle

To a lesser extent, this same rule applies to the very last business day in a month as well – results may vary. Keep in mind that since this strategy is only applicable in a short time window, you need to try to make the most of it. In other words, you’ll lose more money by spreading out conversion transactions throughout the whole month or even just one week.

For USD-to-CAD Use Dollar Cost Averaging

This strategy is essentially just the polar opposite of the “First Day Of The Month” principle, since you’re approaching the currency pairing from the other side. To get the most value for your money when exchanging US dollars to Canadian dollars, try to stay away from the first and last business days within a month. When dollar cost averaging, you should take some time to plan out multiple evenly-averaged conversions that you’ll execute in one week.

Ideally, you’d aim to make the bulk (if not all) of your transactions in the final week of the each month to get the optimal amount of Canadian dollars in return.

How You Should Execute Currency Conversions

Now that you’ve learned a bit more about when to buy USD in Canada, and vice versa, it’s important to understand the best methods related to converting currencies. Of course, if you’re a traveller who is pressed for time and stuck with the decision of convenience over value, you can always just exchange money at a foreign ATM – but this is one of the worst ways to save money in a conversion. The bottom line is, you have two respectable options for conversion:

Traditional Old-Fashioned

For option one, you can go the classic route and bring your convertible dollars to a large banking institution. Although you’re guaranteed a secure conversion process, you’ll lose money in the exchange rate plus any other associated fees. Big banks like the Bank of Montreal have a ton of overhead they need to make up for, so if you’re going with them strictly for convenience purposes you won’t get the best bang for your buck.

New Age Money Saving

Alternatively, you can book a transaction with a reputable online foreign exchange company. Nowadays, online FX-fintech companies are where you can find the most competitive rates for all your currency conversion needs. You stand to benefit from great customer service, a higher degree of rate transparency, as well as fast and secure processing.

FINAL THOUGHTS: WHEN SHOULD I CONVERT MY USD TO CAD?

General Advice Regarding Currency Exchange

The most general advice we can give you is that it’s best to stay realistic when timing your foreign exchange transactions. You ultimately cannot rely on speculative bets and listening to other’s predictions on the price of a currency at a given point. Forecasting currency movements in the future is not an easy task, as currency pairings are inherently super volatile and affected by a number of different factors. If find yourself often making conversions between US dollars and Canadian dollars, it may be in your best interest to open both types of accounts with your primary financial institution, although different banks have different policies regarding fees on this matter.

Converting Currencies As A Canadian Snowbird

Are you a Canadian snowbird? If so, you can also consider signing up for a US dollar credit card to use when travelling south of the border, this way you can duck the exchange rate when making everyday purchases. If you were to just continue spending credit with Canadian cards, you’d most likely see some substantial foreign transaction fees on your statement. Of course, you’ll need US dollars to pay off any charges associated with owning the card, and that’s where you should consider a professional financial exchange service once again.

If you want to learn more about exchanging the USD:CAD pairing, check out our more detailed article on foreign exchange services.