Exchange rates

[teash]

Can somebody explain to a numpty(me that is) about buying and returning foreign currency.
I exchange some uk sterling this morning at M&S, they sell the US dollar for 1.91(or near as damn it) but buy it for $2.06.
So if this is the case could I have just sold them the money back that i`d exchanged and made myself a profit.
Sorry if this seem a stupid Q to ask, but I have seen far worse than this one:)

[Buenchico]

You seem to have got the sums in your head the wrong way round. Look at it this way:

If you hand them �100 and ask them to sell you some US currency, you'll get $191. Now let's say that you change your mind and want your �100 back. They'll say 'OK, that'll be $206 please'. You won't have enough because your money will have effectively been devalued by their profit.

Chris

[teash]

Cheers for that Chris, I think i`m with what your saying but I did say I was a numpty LOL

[lafrancaise]

Teash, Chris is right. That's how exchange agencies make their money.
Put it the other way; you have 100$ in your purse, they buy at $2.06 so they give you �48.54. if you want to exchange your �48.54 for dollars they'll sell at 1.91$ so you get 92.71$. Result you lost over 7$ in the deal.

[teash]

Ah well it looks like i`m gonna have to make my money in the casino`s in Vegas then, cheers for your replies :)

[jno]

the house always wins in Vegas too, teash, just like Marks and Sparks.

[auntiebertie]

if you want to be technical this is called the bid-offer spread - what they buy at is the bid price and what they sell at is called the offer price!