Jumping on the drop in the Euro
 

We got here two weeks ago and the Euro was roughtly 1.37 to the $ and today it is 1.24 and dropping. I'm thinking that the Euro will reverse course and rally once the crisis in the Euro states (currently Greece, Spain, and Portugal) subsides, so I have been pulling Euro from the ATM at this level. Is there a limit on how much Euro can I take back to the USA to be used for future trips... anyone have thoughts on this? Thanks, Tom

...a currency speculator hm hm......what will happen if it goes to par against the USD and stays there?

My thoughts are that that's really risky. As for limits, I'm guessing the U.S. Customs Office has that information on its website.

I certainly wouldn't pack your suitcase with Euros as that suitcase wouldn't make it on the plane. If you put scads of Euros in your carry on it will look suspicious to security. Other than that who would know how much you're carrying on your person. How many tens of thousands are you thinking of bringing back?

Are you a professional foreign exchange dealer? If so: you don't need our advice. If not: why on earth do you think an amateur is going to beat the professionals?

Forex speculation is a zero sum game. Those who make money out of it do so because others are getting taken to the cleaners.

The US has no limit on currency imports. Nor does any civilised country. But you need to declare amounts over $10,000 (in any currency)on entry to the Customs officer.

Yes, I admit that this strategy is a bit of a crap shoot. I'm thinking of maybe 3-4,000 Euro carried on board. We spend a month or more here about every other year. I appreciate the common sense comments from you (I have always needed a rudder in life, never wind in my sail!). I can't remember the last time the Euro was at par, but I do remember when it pushed over 1.50 and we all love a "sale". Tom

US Brokers offer Euro denominated bonds(Nestle? German debt?). Why dont you invest your dollars in Euros that will give you interest too?

imo- you will get a chance at a better conversion rate

And what makes you so sure the rest of the problems with the PIIGS will subside in the next month? Portugal, Ireland, Italy and Spain are economic basket cases and the Germans just set a precedent by bailing out the Greeks. If the Euro goes where it was 8 years ago (90 cents US), you take a bath.

This is not a game that I would play in a big way. The risk of theft or loss of all that cash is not zero.

What if the Euro is no longer in use when you take your future trips? Just saying...

As you mentioned it wasn't very long ago when the € was around 1.50. I went to Europe in March when the rate was 1.34 and I thought it was a sale. Thank God I didn't stock up on €'s during that trip.

If this investment were such a sure thing we would all buy €s and be rich in a few months when it goes up again. The problem is you don't know when or if it will ever go up. And as mentioned, there is a risk of carrying loads of cash. I wouldn't do it.

Just open an account in euros for a future trip. Your money will await you while earning interest.

Choosing how to pay abroad and buying excess currencies when they are weak is something most expats and experienced travellers do. Sometimes you have to wait a long time to benefit. Anyone want Korean Won or ECD ? Both acquired but not needed many years ago !

However, if you buy too many, you are at risk of unforseen changes and withdrawal of notes, etc.

If you are based in US, most would view the USD as being worth more than the Euro in the long term. Long term means sorting out the budget deficit and stimulating the economy - don't get caught with euro notes.

USD has been volatile over the years. Rates have varied between USD1 = €1.21 (2000) and USD1 = €0.625 (2008)

Peter

Then again, what will the dollar be worth the day the Chinese decide to pull the plug?

You folks are great.....thanks for the comments....it is making me rethink my strategy.