US ($) Currency Thread 1 (closed - use thread 2)

Jazzycat

I know lots of questions get repeat requests but can't more experienced users just be a bit more friendly to newbies?

A simply attached link is all it needs. To go to the lengths of making a post criticising them - is it necessary? Once people have been here a while they will know the ropes and what to do.

Here is surely a community to get help and help others?

peterbaker

I've got a couple of linked online accounts one in sterling and one in dollars.

This morning if I buy dollars I can get $2.062 for a £1.

If I move the $2.062 back again into the sterling account I get 3.9% less than the pound I started with.

Nothing unusual about that I guess.

Except it does of course mean that unless I actually need to buy some dollars to spend in the USA in the forseeable future, I'd need to see the pound rise by almost 8 cents in the dollar in order to speculate on the dollar for any period and just break even.

To all you experts out there, are there obvious ways of speculating on small amounts (say up to £10K) with less of a buy/sell difference than the 3.9% I can get?

alchemista

lfc84 wrote: »

i am not planning to travel for something like 10 months (at the earliest, maybe even summer 2009.

if i got cash now are there any bank note redesigns that i need to be aware of ? in this country we have had a redesign of the £20 note recently. I wouldnt want to get a load of cash that was no longer in circulation by the time i travel.

There's no need to worry about that issue, even if a redesign occurs, the old bills can stay in circulation for quite a long time (far past 2009). I'm not aware of any new bill designs coming out in the near term.

alchemista

peterbaker wrote: »

I've got a couple of linked online accounts one in sterling and one in dollars.

This morning if I buy dollars I can get $2.062 for a £1.

If I move the $2.062 back again into the sterling account I get 3.9% less than the pound I started with.

Nothing unusual about that I guess.

Except it does of course mean that unless I actually need to buy some dollars to spend in the USA in the forseeable future, I'd need to see the pound rise by almost 8 cents in the dollar in order to speculate on the dollar for any period and just break even.

To all you experts out there, are there obvious ways of speculating on small amounts (say up to £10K) with less of a buy/sell difference than the 3.9% I can get?

peter, thanks for a rational post!

You've hit one of the negatives with trading - the cost of trading. Like you said, you'll never get the market rate unless you're a massive bank, so you're going to get hit with some sort of fee (maybe an outright fee, maybe a masked fee in the sense of a worse rate than the market rate) every time you exchange. You need to factor that into your speculation.

With stocks, you can spread costs of trading by buying modest amounts at a time. However, with currency, I'm not aware of any way to get better than about a 1% fee on each exchange and that's if you pull out cash which is harder to exchange back (so right away you have to subtract > 2% in costs from your net gain).

It sounds like your current setup is pretty close to the best you're going to get for trading costs.

If you want to invest a little more seriously, I think you'll need to setup a FOREX account with a broker (sorry, I don't have one to recommend) where you can trade similar to stocks. Or, you can trade futures and options like you can with other commodities or stocks. Searching online for forex or looking at financial sites would probably have much more info.

If you find any info, please come back and share it, I'd be interested to hear of better options!

alchemista

duchy wrote: »

I'd buy now if I had the spare cash for next year. I can't see it going much higher if at all.

Your psychic powers have been disproven, it just went up 1% in 1-2 days...

budgetflyer

Warren Buffet is still selling at the moment apparently so there should still be a bit more value to be had.
Problem is, unless you have his phone bugged, you wont know when he changes his mind. The likes of him and George Soros can turn the markets if they want. The problem is the USA credit crisis is probably much worse than the banks are letting on at the moment

ynot2005

dexter-boy wrote: »

Please don't feel that it's YOUR responsibility to answer my question. If you don't think that I've asked a 'sensible question' then don't waste your time writing a response.

spot on dexter, there does seem to be a theme with repeat questions where the self styled guardians of the travel forum seem compelled to post rude/unhelpfull/sarcastic comments because they know the answer or feel a new thread on the subject is not allowed

the search facility may give out of date advice/info , and you never know guardians of the forum you might just learn something new yourself on a new thread on the same old same old question

budgetflyer

peterbaker wrote: »

To all you experts out there, are there obvious ways of speculating on small amounts (say up to £10K) with less of a buy/sell difference than the 3.9% I can get?

Financial spread betting ie futures-what Nick Leason got so horribly wrong. You can put a bet on the opposite way from what you are buying with an "automatic stop loss" in place if it runs the opposite way. Apparently very handy to protect yourself with large purchases ie homes abroad, where a swing on the currency market can have a massive impact on the equivelent price in ££s.I think a lot of airlines have this kind of hedge in place for fuel too.
If your spread bet is losing, then your main investment is gaining.Same opposite way.

You could do it with smalller amounts too.
Provided you aren't just completely guessing, success can be had with as little as 3 out of 10 trades.
ie get it right 3 times, "automatic stops" limit the losses the other 7 wrong ones.
I believe it really is that easy! You just need a bit of bottle + discipline to do it.

Boomdocker

Hiya, I am buying them whilst they are essentially 2 dollars to the pound. In my view unless your buying a serious amount of money then a few cents either way isn't going to make a huge difference. For me a decent dollar rate over the last few years would be 1.65/1.75 (been travelling for the last 7 years for my main holiday) I recall about 5 years ago getting 1.35 so 2 dollars is a fab rate. Stash 'em I say.

peterbaker

Stash 'em?? For what? The thrill of the risk??

Why not Stash your pounds at 7% or whatever in a 'safe' UK account and save 4% cost of trading, say 11% difference in all to your stashed dollars, if things don't change much this next year, and with NO RISK?

Sure if you have a dollar liability on the horizon, e.g. another main holiday in USA, then no real harm saving those in dollars, but otherwise it's roulette.

What happens to your stashed dollars next week if the pound goes to $2.25 which was the likely peak predicted months ago, and doesn't recover for a year? I'll tell you, you will be a good 15% to 20% down, but your 15% to 20% will not have disappeared, oh no! It'll just be in the pockets of habitually grinning people who are much smarter than you!


Edit: Interestingly perhaps, with all this talk of the pound having risen more against the dollar in the last 24 hours, my online facility actually buys me slightly less dollars for a £1 today ... only $2.060, but if I changed my $2.062 that I might have bought yesterday, then today they'll give me 96.2p not 96.1p ! Wow! Confused? You oughtta be by now:-)