Euro vs. Dollar

Jim Kernsey

Hi

I'm off to the states in a few weeks time and i was intending to almost exclusively use my credit card.

But i've seen the value of the euro slip against the dollar and speaking to other people they say its going to continue to slip further. (I'm no expert on this stuff)

They have advised me to buy all my Dollars now. (Its expensive enough as is, i don't want it to cost me more by leaving it for a few weeks)

What do you think?

JK

rainglow

It's impossible to call. The U.S. economy is doing well, Greenspan was upbeat yesterday but the trade data could blow a lot of the ground the dollar has gained away. That said, the euro is being weighed down by political issues like the French and Dutch rejecting the EU constitution and speculation over the state of the EMU.

Personally I don't think it's going to fall off rapidly in the next few weeks but that's just a bet. To be honest unless you're spending tens of thousands of dollars it shouldn't make a huge difference to you.

Have you taken into account the commission that Visa/Mastercard/whoever and your bank charge you for each c/c transaction? I was looking into this a couple of months ago and I think for my AIB Visa card there was a charge of 2.5% for every non-euro transaction. Check it out.

defiantshrimp

You might as well buy the dollars now. You say they are expensive enough as they are now so if the dollar rises in value they will be even more so. If it falls and you have bought them, so what, you managed to afford them and you avoided a risk. For my two cents i reckon the euro will fall in the future. And you should really check out credit card fees, they can be ridiculous.

nesf

Personally I can't see the dollar gaining a lot of ground versus the euro in the long term. The present downturn will blow over after the markets are happy that the eurozone isn't going to break apart (which is highly unlikely).

Personally, I'd plump for buying traveller's checks before I head over. But that would be for pratical reasons rather than market fluctuations. You will not be spending enough money for the currency fluctuations to actually cost you a lot.

A 5cent dollar vs euro change would be considered significant. You'd barely notice such a change if it happened.


I wouldn't worry overly about it. Currency hedging isn't really worthwhile until you are dealing with large sums of money. In my opinion anyways.

Jim Kernsey

Cheers for the advice

I keep going as I was so.

Although I'll findout what the credit card transactions are likely to cost.

JK

mike65

For some reason the dollar tends to gain value during the summer months, so it may be a good idea to buy now.

Mike.