I have been trading on the stock exchange for years. Is this any different from buying Euros now for our trip to Europe in 2008 If the dollar continues to drop as the "experts" claim, I can lock in the exchange rate now by buying Euros now at today's price. I realize the dollar could recover and I would take a loss, but if I quessed right, our trip next year would be less expensive.
Posted by
Elk Grove, CA, USA
6898 posts
I would suggest waiting until next Tuesday to see what the Feds do on the funds rate. The market is strongly suggesting a rate cut of 1/4% to 1/2%. This could improve the dollar a bit.
Posted by
NYC, USA
219 posts
For your spending money, I would agree w/you. Everything such as airfare and expensive hotels have their experts too. Part of their prices reflect this along w/some cushion for a reasonable drop and rise of the exchange rates barring any catastrophe. (Pssss, personally, I think the dollar will go down further.) For the rest of us who are not professional traders or who are not bringing a million bucks to Europe, it will not make that much of a difference. My opinion of course.
Posted by
Salt Lake City
1481 posts
We had some Euros left from our last trip and saved them for our next trip using the same logic. However, I wonder how much of a drop in the dollar you would need to substantially affect the cost of your next trip. Plane tickets will be in dollars. We used our credit card for most of our rooms. That mainly leaves meals and entertainment.
Plus it has appeared to me that there is significant fee for conversion from dollars to euros here in the states. After looking at it this year before our trip, it was better to change using our ATM card once the trip began.
Good luck with it.
Posted by
OP
Tarzana, California, USA
67 posts
My wife and I will not be going to Europe until June of next year so any decline before we leave will have an affect on our vacation. We already have our airplane tickets so most of our expenditures will be after we arrive in Europe.
The non bank exchange rate available to us(and most others)have a commission rate of approximately 5%. The AMT rate is usually 1%, so it is better to use an ATM machine as you buy the Euros at the bank rate less the normal 1% fee. If we were going in a few months, I would not consider buring Euros now. As we are not going until June 2008, there may be advantage in buying now. The equation is simple.....Will the drop in value be more or less that the 4% additional commision we would have to pay. I am betting on the value dropping more than 4% within nine months. As an added bonus, I could open up an acount in Paris with our anticipated vacation budget and earn a few more Euros in interest.
Comments from Rick's readers would be appreciated.
Posted by
Eastern Iowa, USA
7544 posts
I think you hit on some of the issues, but you would also want to consider what the net gain(face value - all fees) would be in buying Euros now and "Selling" on your trip versus taking that same money and investing it elsewhere for the time being and what that net might be. I would think that your potential gain would be marginal, or I am hoping that they would be (Actually hoping you lose your shorts!) as I am travelling next year as well.
Posted by
Lincoln, NE, USA
390 posts
I don't know about Paris, but I know it's very difficult to open an account in London if you don't have proof of residence - just a thought.
Posted by
OP
Tarzana, California, USA
67 posts
Paul,
It was fun bringing this subject up. Do not know if I will buy the Euros or not, but the planning of vacations can be as much fun as going. I think our trip will cost approximately $17,500 for the three weeks we will be gone so if I can make some of this up with trading, it will be worth it. As you said, you will be betting against me when you go next year.
Thank you to everyone for their comments.