I keep bank accounts in UK and US as I have worked and lived in those places for much of the time. When travelling in other places, I simply use ATMs because the amounts are small. Most importantly, playing the currency markets is a loser's game unless you are a professional trader. Doing holiday money currency exchanges for purposes of beating the exchange rates makes you a speculator - at best a gamble that will even out over time and at worst a lamb to be fleeced by the professionals.
My pearl of wisdom here for those who want to transfer larger sums (e.g., staying on a sabbatical for a a half year or year in another country, buying a pied a terre in London or an antique Jaguar to ship home): use OzForex for exchange costs a fraction of using a bank and significantly better than any other means I have found except one - see below). OzForex is Australian-based company, teamed early on with others including Macquarie Bank and now has offices around the world. Easy transparent web site and 24-hour call centre. Sort of a high tech version of the "hawala" currency transfer system - you transfer your funds to OzForex account at big bank in sending country and they "transfer" the foreign funds to their account at big bank in the receiving country and finally on to the ultimate recipient's account (whether that is your account or another party's). Frankly, I don't know whether your own funds actually leave the country. I suspect OzForex matches all its daily trades and transfers only the overhang or uses its own reserves. In any event, it is very inexpensive, professionally run and easy to use. For example, a few years ago I transferred a very large sum into my Australian retirement account when there was the one-off high contribution limit for old farts. I figured that my US bank's total charges (fees + rate spread) would have cost $15000. I found on the internet an "aggregator" (retired bank employee) to handle the transfer for $1500 all in, but took a lot of time doing due diligence on the parties involved. Later I discovered OzForex which would have done the deal for low fee and very tight spread totaling about $750.
An even cheaper way to go is Interactive Brokers out of Stamford, Connecticut, USA. This place trades just about anything, including currency, that is legal to trade in the world at rock bottom costs such that you hardly notice. Indeed, Interactive is the trader for many small to mid size brokers, but also serves retail clients. Easy to use. The only catch is that there is a maintenance fee which is very small, but makes this option impractical unless transferring moderately significant sums a couple of time a year.
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