Buying Euros in Advance
#1
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Buying Euros in Advance
My wife will be travelling to Italy in May of 2016 and due to the strength of the dollar, was considering buying Euros now in case it shoots back up to 1.40 or higher. Any thoughts?
#2
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Wow Christina, aren't you just a ray of sunshine?
garf, even with the potential difference in exchange rates it's usually/generally better to just use an ATM card to get cash once you get to your destination. When buying foreign currency in the US, you generally get a crummy exchange rate and may have various fees to pay as well, bumping your purchase up into the higher effective rates anyway. Plus then you have the security issue of holding all of that cash for your trip.
I use a credit card with zero foreign transaction fees for what purchases I can and use the local ATM's to get cash for smaller purchases.
It *may* make sense for you to prepay some of your expenses such as hotels, but the down side to that is that it pretty much locks you in to those lodgings and you may not be ready to do that a year out.
garf, even with the potential difference in exchange rates it's usually/generally better to just use an ATM card to get cash once you get to your destination. When buying foreign currency in the US, you generally get a crummy exchange rate and may have various fees to pay as well, bumping your purchase up into the higher effective rates anyway. Plus then you have the security issue of holding all of that cash for your trip.
I use a credit card with zero foreign transaction fees for what purchases I can and use the local ATM's to get cash for smaller purchases.
It *may* make sense for you to prepay some of your expenses such as hotels, but the down side to that is that it pretty much locks you in to those lodgings and you may not be ready to do that a year out.
#3
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If you *really* want to bet on the dollar weakening against the euro in the coming year, open a bank account in a European bank and drop several thousand dollars in it. The bank will convert the dollars to euros. If the dollar tanks within the next 12 months, you'll make out like a bandit - provided your initial deposit was large enough to offset the various fees.
However, my bet would be that the dollar will be as strong or stronger 12 months from now compared to the euro. The European economy is basically stagnant. Any adverse shock will send it back into recession and aggravate the debt issues in Greece, Portugal, Spain, Italy, and Ireland. For the sake of the Greek people, they really need to ditch the euro. Sooner or later they will figure that out.
However, my bet would be that the dollar will be as strong or stronger 12 months from now compared to the euro. The European economy is basically stagnant. Any adverse shock will send it back into recession and aggravate the debt issues in Greece, Portugal, Spain, Italy, and Ireland. For the sake of the Greek people, they really need to ditch the euro. Sooner or later they will figure that out.
#5
silly idea. You lose the use of that money for the next year, have the security issues re carrying a lot of cash (and if the € totally tanks you might jump off a cliff and Christina might be right . . . .)
#7
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Do what makes you feel comfortable. My money is making zilch right now and I plan on bringing home euros at this rate for next trip. I have paid 1.58 before. We paid seven cents on a dollar. I bought at 1.04 and did so with two others. 1.11 is what I paid. I am happy I did it at the time. 1.12 today so saved a tiny bit. It was no hassle because someone else did it whose bank did not even charge a fee.
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We used to always wait to use ATM's there but we just got back and this time I'm glad we bought from Wells Fargo prior to. The lines are huge at the ATM's in the airports now and all banks and credit cards are charging 3-5%. We got current exchange rate + a $7.50 fee as non account holders at Wells Fargo.
#10
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down says: "all banks and credit cards are charging 3-5%" Don, you obviously haven't done your homework. There are lots of banks and credit cards that don't charge that amount on foreign exchange. I have two credit cards that have no foreign exchange charge and an ATM card that charges only 1%. There is absolutely no reason to pay 3-5% on foreign exchange.
Did you check to see that Wells Fargo gave you the current bank exchange rate (take a look at www.xe.com)? Most banks give a very poor exchange rate when you but foreign currency. Even flap (above) who got a pretty good rate, still paid 7% over the bank exchange rate for the Euros.
I'm not sure where you were that the lines at the ATMs were so long... I don't think I've ever had more than a couple of people ahead of me at an airport ATM.
Did you check to see that Wells Fargo gave you the current bank exchange rate (take a look at www.xe.com)? Most banks give a very poor exchange rate when you but foreign currency. Even flap (above) who got a pretty good rate, still paid 7% over the bank exchange rate for the Euros.
I'm not sure where you were that the lines at the ATMs were so long... I don't think I've ever had more than a couple of people ahead of me at an airport ATM.
#11
garf, Listen to Iowa_Redhead.
On my most recent overseas trips I got a little walking around cash before I left home in case my ATM card did not work upon arrival. Ofcourse it did work so I paid about a 10% premium for the peace of mind to have $$$ on arrival.
On my most recent overseas trips I got a little walking around cash before I left home in case my ATM card did not work upon arrival. Ofcourse it did work so I paid about a 10% premium for the peace of mind to have $$$ on arrival.
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Edward2005 may be right.
Or the US can bust in the next 12 months, since they've been using the printing machine for so long that the debt ratio is unbearable.One day or another they'll have to figure that.
Bottom line : Euro is at good value for US travelers, can stay like that, can come back or plunge.
See at end of my post a prediction from Goldman giving the Euro at 0.85 $ end of 2016. In that case, keeping your money in $ is quite a good idea.
I've known ratio at 0.9, then 1.55 over the last decade.
From what I've read, 'experts' say that the correct ratio should be 1.25.
'experts' are people who will explain scientifically why their predictions turned to be wrong.
Here an expertise from Golden Sachs (aren't they among the ones who didn't see the subprime crisis coming ?)
http://uk.businessinsider.com/goldma...st-2015-3?r=US
Or the US can bust in the next 12 months, since they've been using the printing machine for so long that the debt ratio is unbearable.One day or another they'll have to figure that.
Bottom line : Euro is at good value for US travelers, can stay like that, can come back or plunge.
See at end of my post a prediction from Goldman giving the Euro at 0.85 $ end of 2016. In that case, keeping your money in $ is quite a good idea.
I've known ratio at 0.9, then 1.55 over the last decade.
From what I've read, 'experts' say that the correct ratio should be 1.25.
'experts' are people who will explain scientifically why their predictions turned to be wrong.
Here an expertise from Golden Sachs (aren't they among the ones who didn't see the subprime crisis coming ?)
http://uk.businessinsider.com/goldma...st-2015-3?r=US
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