Hey All, A friend is travelling through Hong Kong, and sent me this pic of their rates. These spreads seem ridiculously tight to me. Am I missing something? Thanks, Keith For comparison, here's some rates from Travelex in the HK airport that I pulled off of the 'net:
Two separate questions. Is it pegged ? Yes - Go back to any point in time and look. Why does some charge a 13% spread ? Because they can. Nothing to do with pegging. There are many more competitive folks exchanging. Travelex is still a large currency exchange operator in the US. Why would anyone use them and not a back or an ATM ? In my neighborhood the word Schmuck comes to mind.
You are not missing anything. The first one is good. If you know where to go you can find a number of shops that provide these rates. Also although they show these quote they may not have large sum for you to exchange. Some give shit rate fleecing people who don't know any better. Trevelex give the worst rate because it is in the airport so you need them more than they need you. From HK
there is a difference between electronic and physical delivery, you will find the physical delivery spread is a lot wider.
Actually the exchange rate for physical USD $100 bills is superior to wholesale. Much of Asia wants those physical $100 bills - wonder why ?
The reason is that locations in airports can get away with it because they have no competition and there's always a demand for even small currency swaps at airports (people need food, taxi's and can't leave the airport with out local money). It's the same for every city/ airport in the world.
Relatively tight for a street vendor competing with others but if you are looking for reasonable size, "ridiculously tight" is not the phrase I would use. Here is a current screen shot from IBKR for spot settled FX.