Dollar getting worse- buy euros now or next month?
Mar 7th, 2008, 06:45 AM
#21
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>"place a bet" on what you think the exchange rate will be.
Of course, you can virtually bet on anything, doesn't need to be exchange rates. When these things were legalized in Germany, many thought it was a good idea, maybe it still is to secure a certain exchange rate for a company, working like an insurance on rate changes. "Whatever the rate is in one year, ww'll still get the same exchange rate then that, we get today"
However, there's an unlimited potential for abuse.
Of course, you can virtually bet on anything, doesn't need to be exchange rates. When these things were legalized in Germany, many thought it was a good idea, maybe it still is to secure a certain exchange rate for a company, working like an insurance on rate changes. "Whatever the rate is in one year, ww'll still get the same exchange rate then that, we get today"
However, there's an unlimited potential for abuse.
Mar 7th, 2008, 06:52 AM
#22
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Hi TG,
Once upon a time, when telegraph was the fastest way to communicate, a banker with good contacts around the world (think Rothschild) could buy and sell currency faster than the news traveled by boat and make money.
In today's world, where all of the markets are linked by computer 365/24/7 that is almost impossible.
That's why, as logos points out, arbatragists (arbatrageurs) bet on futures (as short as minutes).
Examples of the older form of arbitrage:
An uncle of mine was with the Occupation Forces in Germany. Each of the 4 occupying powers set official exchange rates for their currencies vs the DM.
He made out very well, converting USD to DM to FF to GBP to USD.
Several years later, a cousin caught up in the Korean conflict did a similar thing with USD, Yen and GBP, when he wasn't being shot at.
Once upon a time, when telegraph was the fastest way to communicate, a banker with good contacts around the world (think Rothschild) could buy and sell currency faster than the news traveled by boat and make money.
In today's world, where all of the markets are linked by computer 365/24/7 that is almost impossible.
That's why, as logos points out, arbatragists (arbatrageurs) bet on futures (as short as minutes).
Examples of the older form of arbitrage:
An uncle of mine was with the Occupation Forces in Germany. Each of the 4 occupying powers set official exchange rates for their currencies vs the DM.
He made out very well, converting USD to DM to FF to GBP to USD.
Several years later, a cousin caught up in the Korean conflict did a similar thing with USD, Yen and GBP, when he wasn't being shot at.
Mar 7th, 2008, 07:08 AM
#23
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<i>Time as in future- and forward-arbitrage.</i>
Nice try, but simply buying Euros now because you believe they will gain in value does not constitute arbitrage any more than buying Microsoft stock today, in the hope that it will increase in value tomorrow. If that is what you mean, then fine, but you have denuded the term arbitrage of any sort of precision, and have most certainly stretched it beyond its normal usage. I mean heck, by that definition, we are all engaged in arbitrage, simply by choosing to keep our pay in our home currency.
Nice try, but simply buying Euros now because you believe they will gain in value does not constitute arbitrage any more than buying Microsoft stock today, in the hope that it will increase in value tomorrow. If that is what you mean, then fine, but you have denuded the term arbitrage of any sort of precision, and have most certainly stretched it beyond its normal usage. I mean heck, by that definition, we are all engaged in arbitrage, simply by choosing to keep our pay in our home currency.
Mar 7th, 2008, 07:12 AM
#25
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<i>That's why, as logos points out, arbatragists (arbatrageurs) bet on futures (as short as minutes).</i>
Perhaps I misunderstood. I was taking this statement to be a single thought:
<i>Don't try to get into the arbitrage game with less than $10M.
You should have bought Euro 3 years ago.</i>
Looking back, perhaps Logos really meant these as two separate thoughts, in which case I think we are likely saying the same thing.
Perhaps I misunderstood. I was taking this statement to be a single thought:
<i>Don't try to get into the arbitrage game with less than $10M.
You should have bought Euro 3 years ago.</i>
Looking back, perhaps Logos really meant these as two separate thoughts, in which case I think we are likely saying the same thing.
Mar 7th, 2008, 07:33 AM
#27
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What you do is rather straightforward:
i.e. You "ask" (a bank) to sell you an amout of say 10000€ in (say) six months at todays exchange rate. The bank will sell you that right for a certain amout of money. In between, you can then again sell it to someone else at a better or lower price, depending on that days exchange rate (an the time left until the bet ends).
After six months you either claim your money, which won't be the 10000€ but the difference between what those 10000€ are worth now and then. (minus something for the bank). If that difference in negative, you won't get anything.
The beauty of all this is that you don't need to own 10000€ at all, but "if you're lucky", you'd (almost) gain as much as if you had owned that money. It's a nice way to gamble.
i.e. You "ask" (a bank) to sell you an amout of say 10000€ in (say) six months at todays exchange rate. The bank will sell you that right for a certain amout of money. In between, you can then again sell it to someone else at a better or lower price, depending on that days exchange rate (an the time left until the bet ends).
After six months you either claim your money, which won't be the 10000€ but the difference between what those 10000€ are worth now and then. (minus something for the bank). If that difference in negative, you won't get anything.
The beauty of all this is that you don't need to own 10000€ at all, but "if you're lucky", you'd (almost) gain as much as if you had owned that money. It's a nice way to gamble.
Mar 7th, 2008, 06:32 PM
#28
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Okay, so upon my husband's paranoia, we went to a travelex today and exchanged some money- For $150 we obtained 90 Euro and For another $150 we obtained $140 Swiss Franc. The one time $5.95 fee was waived if you exchange over $300. I thought this was fair. We are flying into Zurich, staying in Switzerland for 3 days, then onto France for 4 days via train. We probably lost a little bit of money, but my husband insists that he would feel safer with a few dollars in our pockets, and then we will use the ATM/Credit Card for the rest of our transactions. I think we will budget ourselves to about 100 Euro/day, the 2 hotels we are staying at in the respective countries have breakfast included. And hopefully we can eat for about $70 Euro/day for lunch and dinner (I sound like Rachel Ray now), and about $30 for miscellaneous....but who knows, will write a trip report when I get back!
Mar 7th, 2008, 07:33 PM
#29
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Just so you are aware of the current market value of your $150.
At today's rate, $150 USD is $153.84 CHF (Swiss Francs). $150 USD is 97.30 Euros.
In the end, it's your peace of mind. You can't put a price on peace of mind.
As a matter of personal choice, I will be withdrawing my Swiss francs at Zurich airport ATM next Wednesday.
At today's rate, $150 USD is $153.84 CHF (Swiss Francs). $150 USD is 97.30 Euros.
In the end, it's your peace of mind. You can't put a price on peace of mind.
As a matter of personal choice, I will be withdrawing my Swiss francs at Zurich airport ATM next Wednesday.
Mar 7th, 2008, 10:41 PM
#30
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We traveled to France in 2006. Took a couple hundred Euros with us that we got from local bank. After traveling so far, we wanted something to start with. Good thing, since the airport went into lockdown for some unknown reason, making it virtually impossible to find ATMs (congestion). You may want euros for taxi, metro, bathrooms, drinks, etc., so is best to have small amount to start with. Once you get to a neighborhood, you likely will find banks with outside ATMs. Make sure you inform your local bank that you will be withdrawing from overseas, and check to see what your limits are. Often banks have like $200/day limits, which is dollar and not euros. If you ask, they will raise limits for you.
We rented an apartment from vacationinparis.com --- I would highly suggest it to anyone. We paid for apartment in advance (in dollars, not euros), left America with apartment key and security numbers in hand, and had no waiting or trying to meet up with people. Apartments were exactly as described, allowed some cooking, and even had washer. Was well worth it!
We rented an apartment from vacationinparis.com --- I would highly suggest it to anyone. We paid for apartment in advance (in dollars, not euros), left America with apartment key and security numbers in hand, and had no waiting or trying to meet up with people. Apartments were exactly as described, allowed some cooking, and even had washer. Was well worth it!
Mar 7th, 2008, 11:23 PM
#31
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I was thinking of getting Euros for a trip from Travel Ex until doing the math made me realize they were charging $.60 on the $1.00 for 1Euro. That didn't include shipping. Doing it this way you've already lost the game.
Mar 8th, 2008, 02:35 AM
#32
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I did buy euro twice before my trips and both times I ended up breaking even. For me the advantage was having peace of mind. I didn't have to worry about the ever weakening dollar. I had my spending money and money for the rentals. Also, while in Ireland, I withdrew a few hundred euro at the ATM at the airport before flying home. At today's rate its hard to know what to do. I hate to think that the dollar will lose more value but you just don't know.
I still have 45 euro left that I am keeping for when and if ever I go back to Europe.
I still have 45 euro left that I am keeping for when and if ever I go back to Europe.
Mar 8th, 2008, 06:20 AM
#33
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No Euros - No Visa. Simple as that for us South Africans. We can either get the bank or Foreign Exchange office run by Rennies etc, to give us the actual money in our hands OR get a letter from our bank that holds the credit card/s stating we have XXXXXX funds available.
Thats not all. The Consulate(French/German - any of them in Europe) requires health insurance for not less that 35,000Euros per person.
It of course, naturally, we must also have a letter from the hotel/s we have pre-booked accommodation with. Internet bookings are not acceptable. They want the old fashioned hotel letterhead on Basildon Bond paper with a signature.
I have just received confirmation we have had our Schengen Visas approved. I can't tell you how relieved I am after all that fiasco!
Thats not all. The Consulate(French/German - any of them in Europe) requires health insurance for not less that 35,000Euros per person.
It of course, naturally, we must also have a letter from the hotel/s we have pre-booked accommodation with. Internet bookings are not acceptable. They want the old fashioned hotel letterhead on Basildon Bond paper with a signature.
I have just received confirmation we have had our Schengen Visas approved. I can't tell you how relieved I am after all that fiasco!
Mar 9th, 2008, 10:24 PM
#34
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Yes, I think peace of mind is important. I may have lost a few dollars, but at least we have some local currency in our pocket. We will most likely be withdrawing from the ATM or using credit card, but sounds like you need to call ahead and let them know you will be travelling. We were in Mexico last month at an all-inclusive and spent mostly US Dollars for taxis and tips etc. Anyway, after two massages and a few souveniors on the credit card(spent less than $200 on the credit card), we came home to find that our credit card was closed due to "suscpicious" activity. They sent us new cards with new account numbers the next week, but we had some bills that are automatically billed to our credit card and some websites that we use reguarly with our credit card (expedia.com, amazon.com, etc. We had to call change them all to the new account which was highly annoying. I didn't even realize this happened until they sent us the new cards! Anyway, I'll be sure to notify our credit card company and bank for our ATM so it doesn't happen while we are in the middle of our trip to Europe!
Mar 10th, 2008, 08:38 AM
#35
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Too many times we have arrived in Europe to find ATM's "down" at the airport--or some other pressing reason to be glad we had a few euros on hand. It is a personal decision--but we prefer to be prepared enough to spend a little extra and have money in pocket upon arrival.
Mar 10th, 2008, 10:36 AM
#36
"<i>Too many times we have arrived in Europe to find ATM's "down" at the airport</i>" - you must have been unlucky. In all my trips to the UK/Europe (between 1 and 4 every year) - only once (at EDI) were there no ATMs available/working. And that single time I merely stepped to a change booth and handed over $100 in cash and got enough £ to tide me over.
No problem at all buying a "few" € from home if it makes you feel more comfortable. But if so, just buy them at your departure airport. You have to check in so early, you will have plenty of time once you are in the departure lounge to buy all the € you want . . . . .
No problem at all buying a "few" € from home if it makes you feel more comfortable. But if so, just buy them at your departure airport. You have to check in so early, you will have plenty of time once you are in the departure lounge to buy all the € you want . . . . .
