Question of the Week: When should I buy my foreign currency?

MikeKBRFX

Bojangles wrote: »

£ has gone down so much coz of Euro news in last few days. Is it likely to recover today/over next few days - that is the question.

(Just worked out that £500 buys me £25 less $ than it would have done if I'd bought them at the start of the week)

I'm off to US next Thursday. What to do?

I may just get cash out there when I need it with my new Clarity card (as recommended by MSE)

Bo

Hi Bojangles! With the current negativity in the market towards mainland Europe, specifically Greece and Spain, the US Dollar is gaining quite a lot of strength, as players in the speculative market are more inclined to put their money into what they see as a 'safe-haven' currency.

Only my opinion; but it wouldn't surprise me to see the GBPUSD exchange rate staying fairly 'low' at the moment - that is, around 1.57/1.58 interbank.

There is not a great deal of positive economic data scheduled for the UK in the coming week either.

shonafraser

I am getting totally confused with these prepaid cards. Most of them have a monthly dormancy fee and cancellation fees so if you just want it for a couple of holidays a year would it not be cheaper to just use your debit card?

AlexMac

To answer the original post- I'd act fast- but do it online, and , as you live in London, take advantage of the 'collect in London' pre-printed or pre-ordered deals.

Look at this website's 'Travel Money Max' comparison tables via the Travel & Motoring tab above.

I did- and got a stonkingly good rate of 1.24 Euros to the pound from Moneycorp (who unlike some FX agents are 'FSA authorised' - which doesn't mean you're totally protected if they go bust while holding your money- but who are reputable, long established and thus relatively safe). I what the site says on the tin;

I clicked on 'Moneycorp (London)' printed a voucher (in fact I printed a couple, as the rate varied up and down even over the course of the morning), went to one of their 7 London offices and got a much better voucher rate over the counter than the 1.15 or so I'd have got by walking in off the street-

I did this a week or so after the Euro tanked in early May, and as I had a bit of spare cash, and UK interest rates are carp right now, bought the Euros for my next couple of trips. I saved £20 compared with the 1.18 I'd have got at M & S, and £30 compared with one high Street bank locally. Similar rates are available for delivery too, but I like the safety of an immediate transaction (as long as you don't get mugged on the tube home by a desparate European Politician or Banker!)

Rates have dropped a little since then (despite a few newspaper travel writer pundits who were then saying 'wait and see' ) but are still great- so I'd jump now if you have the cash and the time

kellyt55

Hi, Has anyone heard recently about when buying euros you should check the serial number of them as these denote which country they were made in and because of the economic climate at the mo you should try to avoid the spanish and greek euros. A friend caught the end of it on the radio yesterday but I would like to know if anyone heard it and knows the full story.
Thanks

kchad

So in amongst all this chaos with the Euro - should we buy now? Or wait and see what comes out of the G20 and Spain and whether Greece can form a Government? Off on hols at the end of July?
Thanks guys.

liamod

I would recommend that you look to purchase now, if you are holding out for the G20 and the Greek situation to change you may end up disappointed. Experts have said to investors that the G20 is unlikely to produce any new potential opportunities for investors which suggests that nothing will drastically change within Eurozone economies as a result of the meeting. With regards to Greece the New Democracy party has already agreed with the PASOK party to form a coalition government so the chance of the rates going in your favor is unlikely, if anything it may go against you.

andygb

We are off to Europe in a couple of weeks time, and would like to get a good deal on Euros now, as the exchange rate is around 1.25 to the pound. Where are the best places to go for the cheapest exchange (charges and commission)?
It used to be the post office in the old days, but are they still any good?

gottohaveit

Just a quick question, its been over a decade since I last ventured into Europe. We're now off to Spain, is it wise to take all cash or do holidaymakers still use travellers cheques? Are these the best to use if they do?

youwot

CURRENCIES COMMENTARY
09/20/12
Safe-haven support helps to strengthen the Dollar this morning.
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
US DOLLAR +444, YEN +22, SWISS -62, CA DOLLAR -40
Upcoming International Reports (all times CT)
09/20 10-Yr TIPS Auction
09/20 5-Yr note Auction Announceme
09/20 Japan BOJ Report 12:00 AM
09/20 German Producer Price Index 1:00 AM
09/20 Swiss Trade Balance 1:00 AM
09/20 France Manufacturing PMI Fla 1:58 AM
09/20 France Services PMI Flash 1:58 AM
09/20 Euro-Zone Manufacturing PMI 3:00 AM
09/20 Euro-Zone Services PMI 3:00 AM
09/20 Swiss Industrial Production 3:15 AM
09/20 UK Retail Sales 3:30 AM
09/20 Initial Jobless Claims 7:30 AM
09/20 Philadelphia Fed Manufacturi 9:00 AM
09/20 US Leading Economic Index 9:00 AM
09/20 EIA Gas Storage 9:30 AM
09/21 Canadian Consumer Price Inde 7:30 AM
09/21 Canadian Wholesale Trade 7:30 AM
DOLLAR: The Dollar has found a strong vein of support from overseas risk concerns this morning, and is likely to
extend this week's recovery later on in the session. Weak economic sentiment readings from China and the Euro
zone have fueled risk aversion throughout global markets, which has helped the Dollar overcome longer-term
pressure from last week's Fed decision on fresh QE. There may be some potential headwinds from US economic
data later this morning, particularly with a Philly Fed number that has shown recent volatility. If the Dollar can get
through the US data window with the market's focus still on overseas difficulties, instead of upcoming Fed easing,
this week's rebound is likely to gather additional upside momentum. The Dollar should climb up towards the 79.85
level later in today's session and will continue to be well supported as long as risk aversion dominates global
markets.
EURO: The December Euro remains squarely on the defensive this morning, and will need to see tangible signs
of progress with EU debt problems to put the brakes on this current pullback. While German business sentiment
numbers were able to beat the market's lukewarm expectations, an abysmal set of French sentiment numbers
provided further evidence of the economic damage done to the "core" EU by recent peripheral debt problems.
Today's Spanish debt auction found decent demand, due in large part to traders expecting that nation to formally
request EU and IMF aid during the near future. With more than 4 cents in gains over the first two weeks of
September, there may be further downside left in the December Euro if risk aversion continues to dominate global
markets. The December Euro may slide down towards the 129.20 level later today if overall market risk sentiment
does not show strong improvement.
YEN: The December Yen will benefit from today's "risk off" mode in global markets, although the threat of
intervention is likely to keep prices well away from last week's highs. A smaller than expected Japanese trade
deficit may also provide some limited support but for now, the ebb and flow of global risk aversion will dictate
whether the December Yen can extend a sizable rebound from yesterday's lows. Trade tensions with China are
also casting a long shadow over the market, so Japanese authorities will be concerned if the Yen gains any
further strength from these current levels. The December Yen may rise up towards the 128.30 level during today's
session but will need risk aversion to dominate global markets in order to sustain this current recovery rally.
SWISS: The December Swiss has taken a decisive step away from last week's highs for the move, and is likely to
remain under severe pressure during today's session. While the December Swiss continues to outperform the
Euro, last month's decline in the Swiss trade surplus shows that Euro zone difficulties will continue to weigh on
the December Swiss going forward. The December Swiss should find support around the 107.05 level during
today's session but will need to see a vast improvement in Euro zone sentiment to recover from this week's
losses.
POUND: The December Pound is finding moderate pressure this morning but continues to find enough support to
remain in close proximity to the recent highs. A better than expected reading on UK Retail Sales may help to
dampen market expectations for UK quantitative easing over the near-term, but the December Pound will have a
tough time reaching new high ground with carryover pressure coming from the Euro zone. The December Pound
should find support around the 161.70 level this morning and will be looking for improving risk sentiment in order
to regain upside momentum.
CANADIAN DOLLAR: The Dec Canadian has sustained heavy overnight losses, and will need to see a vast
improvement in market risk sentiment to put together any sort of recovery. In addition to recent weakness in
Canadian economic data, the more than $8 sell off in crude oil prices this week has been a key factor in the Dec
Canadian falling well away from last week's 13-month highs. A positive reception for today's US data will provide
some limited support but the Dec Canadian will need to see a very broad-based recovery in commodity and
global equity markets just to sustain any type of rebound back above the 102.00 level during today's trading.
TODAY'S MARKET IDEAS:
The Dollar should continue to benefit from safe-haven support during today's trading, and is likely to receive an
additional boost from any positive reading from today's US economic data. If there is a turnaround in overall
market risk sentiment later this morning, however, the December Pound should find enough support to climb back
above the 162.40 level.
NEW RECOMMENDATIONS:
None.
PREVIOUS RECOMMENDATIONS:
None
CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that
may appear elsewhere in this report.
US DOLLAR (DEC) 09/20/2012: Momentum studies are still bearish but are now at oversold levels and will tend
to support reversal action if it occurs. The market's close below the 9-day moving average is an indication the
short-term trend remains negative. The market could take on a defensive posture with the daily closing price
reversal down. The market tilt is slightly negative with the close under the pivot. The next downside target is now
at 78.83. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 79.40 and 79.65, while 1st support hits today at 78.99 and below there at 78.83.
EURO (DEC) 09/20/2012: Momentum studies are trending higher but have entered overbought levels. The close
above the 9-day moving average is a positive short-term indicator for trend. The daily closing price reversal up on
the daily chart is somewhat positive. The market tilt is slightly negative with the close under the pivot. The next
upside target is 131.48. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next
area of resistance is around 131.07 and 131.48, while 1st support hits today at 130.15 and below there at 129.63.
JAPANESE YEN (DEC) 09/20/2012: The major trend could be turning up with the close back above the 60-day
moving average. The daily stochastics gave a bearish indicator with a crossover down. Daily stochastics turning
lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support
is penetrated. The market now above the 18-day moving average suggests the intermediate-term trend has
turned up. The outside day up and close above the previous day's high is a positive signal. There could be more
upside follow through since the market closed above the 2nd swing resistance. The next downside objective is
125.84. The next area of resistance is around 128.49 and 128.97, while 1st support hits today at 126.93 and
below there at 125.84.
SWISS (DEC) 09/20/2012: Daily stochastics have risen into overbought territory which will tend to support
reversal action if it occurs. The market's short-term trend is positive on the close above the 9-day moving
average. The daily closing price reversal up on the daily chart is somewhat positive. With the close higher than
the pivot swing number, the market is in a slightly bullish posture. The near-term upside objective is at 108.47.
With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around
108.23 and 108.47, while 1st support hits today at 107.67 and below there at 107.36.
DAILY TECHNICAL STATISTICS
CLOSE
Calculations based on previous session. Data collected 09/19/2012
Data sources can & do produce bad ticks. Verify before use.

2cb

I'm buying €1000 or so in the next month. So, buy now before the pound crashes further, or wait for the pound to recover? Who'll offer me some speculation?