Buying Euros and no, this is not the usual question

How do you know the euro wont drop more? Where do you get a good exchange rate in the US? Now if you ever find yourself in Kansas City on a Tuesday afternoon I know a young lady who drives a baby blue Trabby that might be able to help you.......

It's a bit like playing the stock market, I suppose. You could buy a $100 now and it could be worth $200 later, or $50.

It is called currency trading and most lose. The best you can do in the US is a premium of 5 to 10% so that means the dollar would have to fall another 10% to breakeven. And then there is the opportunity cost associated with your money that probably adds another 2 to 4%. So that means you need a good additional 15% drop. Who knows - it is a sucker play. Now, I have bridge for you in Brooklyn that is very reasonable. Any interest? You don't know enough to come close to winning at this game.

PS There is a huge difference between the stock market and currency trading. Currency trading is really commodity trading. Whole different ball game.

No. I'll take my chances with a relatively rosy outlook here in the U.S. and a low cost index fund. Chances are outstanding that I'll see a return on my investment there of 6 to 20 percent.

Stockpiled dollars, whether in an investment or a bank account, can earn interest or increase in value. Stockpiled euros just sit in your safe earning nothing, possibly increasing in value - and possibly decreasing.

Lisa,

Im heading to mostly Euro countries this sept and i will get some before my trip, but as far as "stockpiling" for 2015 and beyond, i will do the wait n see approach since i may not be doing any Euro countries in 2016, 2017 or ?

happy trails.

Back when Italy used the lira, on a 3-month trip it dropped from 1600 in May to 900 in August. It was shocking for my budget.

And actually, this is a pretty usual question.

I'm lucky in this respect. Maybe because so many people here travel abroad, there are a couple of banks that have foreign currency ATMs throughout the country, dispensing euros and dollars. There's no local ATM fee and the exchange rate is almost always within 1% of the mid-market rate. So, knowing I will need several thousand euros, I started buying when the rate was $1.23-1.25 to the euro (a lot less than the 1.37-1.39 on my last trip). Now it's down to $1.18 and I wish I'd waited!!

If you can buy euros at good rates and you are planning a trip, and you have the cash, why not? Are you really earning interest on the money? I'm not, sigh.

The way i see it, its just like gambling. If you could predict the market, then everyone would be doing it. However with the UK bank scandal that will be interesting to see how that comes out, who knows, maybe knowing any of them would have helped.

happy trails.

No, because of course my trip in May will be to non-Euro countries, Poland and Czech Republic. I won't travel again for another year and who knows what might happen in between?

It doesn't make any sense. If the dollar is getting stronger (gaining value against the euro), then buying now will cost you as the exchange rate gets even better. And that doesn't even account for the cost of buying currency in the US, usually about 10%.

And if the dollar begins to fall again, it would have to fall by at least the cost of buying the euro (roughly 10%) or you would still lose money.

Either way, you will likely lose. Don't try and be a currency speculator. Just hope for the best exchange rate when you travel and get your cash from an ATM.

In a way it is betting. That depends how much you are comfortable with in betting and how much you bring back to have for the next trip.