US Dollar Exchange Rate following US Presidential Election

RebelScorned

Hi all,

I'm travelling to the US in 2 weeks time and I was holding out for the results of the US Presidential Election as I understood that it would have an effect on the strength of the US Dollar. I was planning on changing about €2k into $ and lodging money on to my credit card to use over there (instead of carrying a lot of cash). FX confuses me muchly - I've been keeping an eye on the rate over the last few weeks in particular and it's hovering around the €1 = $1.10 mark (nowhere near the $1.45 I got back 8/9 years ago!). I'm just reluctant to buy dollars this week if I could potentially get an extra $0.10 per € next week.

My questions are:

1. All feelings towards the US election aside, do you think the fact that Trump was elected will be better for buying USD? I would have presumed that, given the effect that Brexit had on the GBP directly after the result, that we would get a better rate for our € when we convert. A colleague of mine said this morning that the weak dollar would benefit those selling USD as opposed to those buying USD?

2. Is the currency position so volatile that i should change more cash into USD before I go instead of putting money on my Mastercard and paying whatever the rate is on the day? I'm guessing it could go either way but would love some educated guesses and input.

Thanks in advance.

km991148

No one can answer #1 - If I could I would be off getting rich instead of on boards.ie! However if the US$ does weaken it will benefit you, yes.

There is likely to be volatility and waiting to spend on a card at the time will mean you will be exposed to that. Revolut seems to be the best bet for those not wanting to carry cash. If you see a rate you are happy with before you go you can lock that rate in.

I would take a guess that its not going to move that much over the next cpl of weeks.. but these days who knows! (also I transferred a significant amount of € to £ about 10 days before brexit.. so I might not be the best to answer!)

Rackstar

What type of credit card have you got that you can lodge dollars on to?

coylemj

The ECB captures FX rates each day at 13:15 GMT. According to them, the USD/EUR rate on Nov. 1st was 1.1025, today (Nov. 9th) it's 1.1022. So Trump's election has not caused the currency to collapse. And the FTSE-100 is up today by 0.5%.

RebelScorned

Rackstar wrote: »

What type of credit card have you got that you can lodge dollars on to?

I was going to lodge euros to my Mastercard so that I can use it like a debit card over there in stores etc. (i.e. no big bill when I come home!)

jme2010

RebelScorned wrote: »

I was going to lodge euros to my Mastercard so that I can use it like a debit card over there in stores etc. (i.e. no big bill when I come home!)

I've done that before. I think you'll get hit with cross-boarder fees for every single transaction though.

Look at putting €1000 on a currency card from an post. They have no transaction fees and you can with draw from atm's for €2.50. I've used them on every holiday in addition to cash dollars and credit cards. You can even log-in and check your balance and transactions.

http://www.anpost.ie/AnPost/MainContent/Personal+Customers/Money+Matters/Foreign+Exchange/Choose+the+PostFX+MasterCard+Currency+Card.htm

myate

Just back from a 3 1/2 week road trip over in US...had a mixture of cash & the currency card @jme2010 mentioned. That's just like using cash as its accepted pretty much everywhere, and they finally have chip & pin in a lot of places over there, so it acts like a debit card. The exchange rate is so poor now, easier to think of it as 1:1 as it's not far off!

jack presley

Rate was hovering around the high 1.10 mark for the past week or so. Shot up to over 1.125 yesterday after Trump got in but it's now down under 1.09 which means the dollar is performing better after Trump than it was beforehand.

Might not be related of course as there are other factors at hand.

coylemj

RebelScorned wrote: »

I was going to lodge euros to my Mastercard so that I can use it like a debit card over there in stores etc. (i.e. no big bill when I come home!)

The only advantage of preloading a credit card with cash is to avoid interest charges from ATM withdrawals because there's no interest-free period when it comes to cash. It's of no benefit whatsoever when it comes to hotels and store purchases.

coylemj

jme2010 wrote: »

Look at putting €1000 on a currency card from an post. They have no transaction fees and you can with draw from atm's for €2.50. I've used them on every holiday in addition to cash dollars and credit cards. You can even log-in and check your balance and transactions.

An Post is currently offering 1.0594 for that (EUR to USD) conversion which is 2.8% above interbank (Bloomberg quoting 1.0897), my Mastercard currently charges 2.25% on non-Euro transactions so would be cheaper than using the An Post card.

jack presley

Yeah, with the post office "commission free" normally means crap rate.

Awayindahils

RebelScorned wrote: »

Hi all,

I'm travelling to the US in 2 weeks time and I was holding out for the results of the US Presidential Election as I understood that it would have an effect on the strength of the US Dollar. I was planning on changing about €2k into $ and lodging money on to my credit card to use over there (instead of carrying a lot of cash). FX confuses me muchly - I've been keeping an eye on the rate over the last few weeks in particular and it's hovering around the €1 = $1.10 mark (nowhere near the $1.45 I got back 8/9 years ago!). I'm just reluctant to buy dollars this week if I could potentially get an extra $0.10 per € next week.

My questions are:

1. All feelings towards the US election aside, do you think the fact that Trump was elected will be better for buying USD? I would have presumed that, given the effect that Brexit had on the GBP directly after the result, that we would get a better rate for our € when we convert. A colleague of mine said this morning that the weak dollar would benefit those selling USD as opposed to those buying USD?

2. Is the currency position so volatile that i should change more cash into USD before I go instead of putting money on my Mastercard and paying whatever the rate is on the day? I'm guessing it could go either way but would love some educated guesses and input.

Thanks in advance.

Revolut is class if you have time to get it setup.

jack presley

Euro continues to drop. Down to just above 1.07 now. Is this the lowest it's been in a long while?

coylemj

jack presley wrote: »

Euro continues to drop. Down to just above 1.07 now. Is this the lowest it's been in a long while?

Yes, the lowest since last January that I can see looking at the ECB historical rates.

It was 1.07x on 5th and 6th of January 2016, hasn't been below 1.08 since then up to today.

keano25

Down to 1.04 with An Post today..

coylemj

keano25 wrote: »

Down to 1.04 with An Post today..

You're quoting the An Post 'Sell' rate for US Dollar notes. The interbank rate is 1.0765 according to the ECB daily bulletin today so it's barely moved since yesterday.

keano25

coylemj wrote: »

You're quoting the An Post 'Sell' rate for US Dollar notes. The interbank rate is 1.0765 according to the ECB daily bulletin today so it's barely moved since yesterday.

Is it not 0.0302 of a difference?

coylemj

keano25 wrote: »

Is it not 0.0302 of a difference?

No, retail (consumer FX) rates involve separate rates for buy and sell - the difference is called the 'spread' and is where the banks and bureaux du change make their profit.

In round numbers, An Post is selling US dollars at 1.04 and buying (cards only) at 1.10. The ECB quotes the interbank rates which is roughly the midpoint between buy and sell. On Monday (Nov 14th) they quoted 1.0777, today it's 1.0765 so very little movement.