US Dollars

Legacy_user

I have US$7000 and im looking at the best and safest way to save it. Any ideas?

Thanks

R.

Tim_L

Depends what you think is going to happen to the value of the dollar relative to the pound, which is anyone's guess at the moment - you either gamble on a rise in the dollar and leave it somewhere in the US, or gamble on the status quo or better and bring it over to the UK. US interest rates are very low but probably rising. UK interest rates are relatively high and also rising, probably in tandem with the US rates, so there's nothing obvious that would cause a differential in currency values at present.

To be honest, the interest on $7K/£4K is going to be peanuts, so it comes down to a gamble on currency rates and whether you want the cash to be easily accessible to you in the UK.

DiggingOut

Consensus seems to be UK interest rates will peak around 5.5%, or 1% higher than today. US rates expected to go at least to 3%, 1.75% higher than today. So the interest rate differential gap is likely to be smaller, which should be dollar positive.

OTOH, high US federal budget deficit and trade deficit are dollar negative.

Short term, no one can guess, but medium-long term I personally am somewhat bullish on the dollar vs sterling or euro. The dollar is very weak based on past history, and I expect it to return to closer to historical norms before too long. But it could get weaker before it gets stronger.

IvanOpinion

Isn't there an election coming up at the end of this year ?  If so then George W will want the dollar to be weak to boost exports and the internal economy.  Therefore the dollar might not start rising until early next year.  But, as everyone else says .... who knows ?

Also, if you intend to travel back and forwards to America either on business or on holidays then leaving it as dollars could be more beneficial - saves on losses due to exchange rate conversions/commission etc.

The question is, given the old indian curse, will George W make it to an election ? ? ?

Ivan

Pal

Lets hope not.