Falling Dollar

Mar 10th, 2003, 06:14 PM
  #21  
 
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Actually I think it is a bit of both: ie, dollar weakening & the euro strengthening - although more of the former than the latter. For eg, my home currency, the humble Aussie dollar, has appreciated around 17% against the US dollar in the year to February but depreciated 5% against the euro.
Lucy_of_Oz is offline  
Mar 11th, 2003, 12:44 AM
  #22  
 
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For those who wonder where it's going, I watched an economic show on European TV with European and American economists expecting the difference to increase--probably to the euro being equal to about $1.15 (the best, commercial rate), which means for the average consumer, who doesn't get the "best" rate could be more like a euro costing $1.20
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Mar 11th, 2003, 01:10 AM
  #23  
 
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I can't believe people are quibbling over 13 cents on the dollar! That's really not a lot of money. I'm going to London in 2 weeks and I wish the USD to GBP exchange rate was that great.
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Mar 11th, 2003, 02:05 AM
  #24  
 
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We have the same concerns for our trip to Italy this summer. We booked apartments for a specified Euro amount and the apartments suddenly began costing us a bit more than we booked for (in the US Dollar amount, of course).

So, since we have to pay in Euro cash when we arrive, we simply began buying Euros a few weeks ago. Now we feel better that at least our accomodation prices are locked in at close to what we booked them for (an exchange rate of 1.06 at the time).

Things could turn around completely, get even better than 1.06, and I could kick myself for buying at 1.07, but I figure it's better to be safe than sorry at this point.
Statia is offline  
Mar 11th, 2003, 05:14 AM
  #25  
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statia,

Where did you buy Euros at? Everywhere I look thaey jack the prices up on exchange rates (+5%-10%)
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Mar 11th, 2003, 05:59 AM
  #26  
ira
 
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Hi
Re predicting the future:
One year an economist friend showed me the data for the past ten years on the US dollar vs various European countries. The dollar went up in the winter and down in the summer, when the tourists went to Europe.
So, that winter I bought European currencies for my summer trip.
Result? The dollar kept rising that year and I lost about 8%.
ira is offline  
Mar 11th, 2003, 06:01 AM
  #27  
 
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Dgruzew,

I live very near St. Barth's and have been buying them from friends who go back and forth. So, I suppose I'm in a bit of a different circumstance (thank goodness).

I agree with you, though. The bank here (even though I'm in a non-Euro Dutch territory) is trying to rip us off on Euros, as well.
Statia is offline  
Mar 11th, 2003, 07:18 AM
  #28  
 
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Patrick,

Maybe you can help: for my friends and I who have been studying over here in France, we are being charged by our US banks for ATM usage .. I use Washington Mutual, and I've found between $18 and $39 fees for my ATM usage ... no one that I know of (who've called their banks and told them that it is illegal to be charging when the european ATMS don't forwarn a usage fee) have been able to stop their bank from charging them. Any ideas?
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Mar 11th, 2003, 07:25 AM
  #29  
 
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The rules of Cirrus and Plus prohibit the imposition of fees by banks for using their machines. That is why the European banks do not add fees to withdrawals by US cardholders.

However, these rules do not prohibit your bank from charging whatever it wants for withdrawals at another bank's machine. These fees range from $0 to as much as $5 per transaction. This is a decision solely up to your bank.

You have to check with your bank to see what they are charging. Some banks charge more for withdrawals from international ATM's than they do for domestic withdrawals; others charge the same amount.

As cirrus and plus are part of the mc and visa systems respectively, the rate used in the interbank rate plus a 1% charge to cover currency fluctuations. I suppose this is reasonable. Some banks, already surcharging additional amounts for use of a credit card on international transactions, are now adding an additional 2% to the exchange rate. These banks at present are a distinct minority but again it is something one should be aware of.
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Mar 14th, 2003, 05:23 AM
  #30  
MGB
 
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Well if we ever wondered what drives the Euro, yesterday was a great example. The dollar against the Euro went from 90 something to 92 something as the stock market had a great day. Will it be short lived?
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May 8th, 2003, 11:57 AM
  #31  
 
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In the New York Times today...

"Euro Climbs to a 4-Year High Against Dollar"

http://www.nytimes.com/reuters/busin...ets-forex.html

"The euro hit a four-year high of $1.1506 on Thursday"

"The euro, born on Jan. 1, 1999, first traded against the dollar at a value of $1.1747"

"The dollar suffers not only from low U.S. interest rates, but also from a $500 billion trade gap that sends more cash abroad. A sluggish economy and sputtering financial markets are not attracting enough capital to raise demand for dollars."

capo is offline  
May 8th, 2003, 06:11 PM
  #32  
 
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Over the last 12mths these are the strongest major currencies agst the USD:

EUR + 27%
CHF + 22%
AUD + 19%
CAD + 12%
JPY + 10%
MXN - 7%
BRL - 16%

Everything in financial markets is relative. Whether a currency is declining or rising agst another is relative. We live in a US centric world so everything is relative to the USD. Looking at the above one cld say the USD is declining agst most currencies, with the exception of Mexico and Brazil.Or you cld say the others are rising. It's the same thing as currencies are a zero sum game.

I work as an adviser in financial markets and these are the market's thoughts. The dollar is declining becos of the twin deficits (current and capital accts).

The US imports more than it exports hence the current ac deficit. More investment is leaving the US becos of low interest rates hence the capital acct.

The fall of the dollar is not insignificant. You wld hv gotten a holiday in Europe for 27% less last year. You hv to pay 27% more for a BMW in the US this yr.

The only way for the USD to rise again is to either import less (which is happening naturally due to dollar weakness)or to get US interst rates up to attract capital. Greenspan has said the latter is unlikely so the USD will remain weak for awhile.

Conversely if the ECB cuts rates (which they didnt last nite) it wld narrow the i/r gap and make US rates appear more attractive, relatively.

Hvg said that, the EUR is just back to where it was when it was born. So if you had been in a himalayan retreat for the last 4 years you'd hv said the damn dollar hasnt moved at all!
linwein is offline  
May 10th, 2003, 11:50 AM
  #33  
 
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Re: the comment in the NY Times article, "The dollar suffers not only from low U.S. interest rates, but also from a $500 billion trade gap that sends more cash abroad" and linwein's comments "The dollar is declining becos of the twin deficits (current and capital accts). The US imports more than it exports hence the current ac deficit. More investment is leaving the US becos of low interest rates hence the capital acct."

Those Americans going to Europe may pay more for their vacations because of the falling dollar, vis-a-vis the euro, but many of them have also likely saved money due to the lower interest rates that have been part of the reason for the dollar's decline.
capo is offline  
May 10th, 2003, 12:24 PM
  #34  
 
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Also lower dollar helps exporters and means job security for those who work for them. Also higher import prices mean people are more likely to buy US-made goods, stimulating consumer demand. And while it's bad news for US visitors to Eurozone, more Europeans are likely to visit US attracted by lower prices.
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May 19th, 2003, 09:10 AM
  #35  
 
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May 19, 2003: "U.S. Aide's Comments Drive Down Dollar in Currency Markets"

http://www.nytimes.com/2003/05/19/bu...9CND-DOLL.html

"As the dollar fell, the euro rose as high as $1.1737, the first time in more than four years that the euro has been worth more than $1.17, the level at which it began trading when the euro was introduced as the common European currency in January 1999."

"traders interpreted Mr. Snow's remarks as confirmation of their suspicions that the United States favored a weaker dollar"

"Allowing the dollar to weaken could also help the Bush administration politically."

"the reappearance of large and growing budget deficits has hurt the United States' reputation for fiscal stability, he [Tony Rademeyer, HSBC's head of corporate banking and markets for the Asia and Pacific region] said."


capo is offline  
May 19th, 2003, 09:52 AM
  #36  
 
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It gets even worse capo!

From Bloomberg.com...."Robert McHenry, who oversees $2.5 billion of international investments at Hartford Investment Management Co. in Hartford, Connecticut, expects the dollar to fall to $1.40 per euro in the next six months."
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May 19th, 2003, 11:09 AM
  #37  
 
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I think despite the falling dollar there will still be tourism. Look at Great Britain and the pound against the dollar. The pound has always been stronger against the dollar and still it is one of the top destinations for Americans.
I have taken advantage of the economic situation in Brazil and Argentina. Brazil has always been a good value but now it is excellent. Argentina was always expensive to visit now is affordable due to their economic problems.
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May 25th, 2003, 07:09 AM
  #38  
 
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May 25, 2003 "For the Euro, the Worst Time for the Best of Times"

http://www.nytimes.com/2003/05/25/we...ew/25LAND.html

"A falling dollar translates directly into a rising euro, which makes German-built cars and French wine more expensive in the United States. Just as a weak dollar could help revive the American economy, a surging euro could hobble the exports Europe needs for growth."

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May 25th, 2003, 08:12 AM
  #39  
ira
 
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Hi all,
With respect to low interest rates: I have just refinanced my mortgage. The savings will more than make up for the increased cost of travel to Italy this fall.
ira is offline  
May 27th, 2003, 09:43 AM
  #40  
 
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May 27, 2003: "Euro Reaches New Peak Against Dollar"

http://www.nytimes.com/2003/05/27/bu...7CND-EURO.html

"The newly invigorated euro reached its highest level ever against the dollar today, exceeding $1.19 in Tokyo trading."

"Officials at the European bank said the euro was merely reclaiming its proper value. But the rapid rise has unnerved corporate executives here, who fear it could strangle Europe's economy by pricing their exports out of the American market."

"Critics were already complaining that the bank, with its single-minded focus on curbing inflation, has paid little heed to the continent's more pressing problems, which include two years of near-stagnation, soaring unemployment and, in Germany at least, the specter of deflation."

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