Currency exchange: how long do you wait to get the best rate?

I’m never taking more than about £300 worth with me in cash, so convenience is the major factor.
I can walk into my local Post Office and get Euros over the counter without any hassle and the exchange rate is competitive.
Okay I’m in a minority living and working in a small town but hunting around to save 2 or 3 pounds is for me not worth it.

Do not change cash between currencies; instead use cards for purchases and cash withdrawals. An electronic form of payment is inherently cheaper than changing banknotes because extraterritorial cash is expensive to handle. When you use a card, Visa or MasterCard obtains a wholesale interbank rate and no money crosses borders. GBP is paid between UK bank accounts and the foreign currency is paid between bank accounts within the foreign country. When you change cash, either in the UK or abroad, one currency will always be extraterritorial, i.e. outside its home country. If you change cash in the UK, the foreign cash will be extraterritorial, or if you change your cash abroad, the GBP will be extraterritorial. Physical cash is inherently expensive to handle, extraterritorial cash even more so.

In the wholesale banknote trading markets, cash is consequently traded at a premium or discount compared to electronic funds, and the premium or discount depends on several factors. For example the physical state of the banknotes is relevant; in Russia and other parts of Eastern Europe a pristine state is expected. The denomination is also relevant because smaller denominations are more expensive to transport. Another factor affecting some currencies is the issuer of a banknote; for example there are multiple issuers of GBP and HKD banknotes, and Scottish banknotes have a lower wholesale value than Bank of England banknotes. Added to these wholesale costs are the retail costs incurred by bureaux de change, such as employing staff and the potential movement of the wholesale interbank rate while a bureau de change holds the cash. Forget taking cash between countries unless you want to pay unnecessarily for these many costs through a worse exchange rate.

Although Visa and MasterCard obtain a wholesale interbank rate, many UK card issuers subsequently add a percentage fee (often up to 3%) for non-GBP transactions. Given that the card issuer does not partake in the foreign exchange element of the transaction, any such fee is not for foreign exchange but a fee for nothing, feasible because many consumers are less sensitive to or observant of fees when the transaction currency and billing currency are different. You can avoid such fees by getting one of several cards suitable for overseas spending, e.g. Halifax Clarity.