The total cost you are charged by your foreign exchange provider consists of the margin from the mid-rate offered plus any fixed or percentage fees.
These margins and fees vary significantly for International Money Transfers and Travel Money transactions as shown below.
Whenever you are researching a particular exchange rate you are actually interested in two currencies as exchange rates are the ratio between two currencies.
So it follows that if you are determining the best time to transact, in this case the EUR vs DKK, you should pay attention to the forecasts and trends for both Euro and Danish Krone:
Euro (EUR) outlook
Against the dollar and pound, the euro remains weak: rates between $1.11 and $1.12 haven’t been seen since June 2017, and a rate of £0.85 was only half a percent above a new 2-year low. The euro fared better against the Australian dollar, with EUR/AUD rates slightly above 2018’s average at A$1.595.
Euro weakness has been driven by Brexit uncertainties (a “flextension” means that Brexit has been pushed back until October) and has followed March’s meeting of the ECB, at which the central bank said it will not raise interest rates until 2020 as part of an effort to lift the eurozone economy out of this “period of continued [economic] weakness.”
Against the dollar, the Danish krone remains weak. At kr6.635 per USD on April-22, the krone is only 2.4 percent away from making a 22-month low.
Being pegged to the euro, krone weakness has been driven partly by Brexit uncertainties and has followed recent dovishness from the ECB: with the eurozone economy struggling, the ECB has said it will push back its first interest rate rise in 7 ½ years to 2020 at the earliest.
Forecasts: Based on ING’s March forecasts for the euro, the krone is likely to continue to depreciate against USD over the coming months. ANZ has also said that the krone will weaken, most likely to kr6.9 by mid-year. Danske Bank EUR/USD forecasts imply a USD/DKK rate between kr6.45 and kr6.65 at year-end.
Why can't I just get the EUR/DKK market rate I see online or in the media?
The EUR/DKK mid-rate is the rate you will see quoted online or the news, nobody except the largest banks and businesses can get
exchange rates close to this mid-rate. It is actually just the theoretical half-way point (hence mid-rate) between
the last rate at which the EUR / DKK was traded (bought or sold) in the international markets.
Getting a good market rate is mainly about timing however the transaction margin
you end up being charged can be considerably reduced by around a few percent (of total amount being exchanged) for
travel money and possibly over 5% to 6% when sending money.
The exact potential savings depends on the currencies being exchanged and the amount you are transferring and if you are willing to shop around.
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