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Thread: when should I trade my currency?

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    God/dess anomar's Avatar
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    Default when should I trade my currency?

    I'm travelling to Europe in September. I'll be going to Finland and the Czech Republic. The way I understand it, the Euro is currently strong against the American dollar and the dollar is strong against Czech money. I already have the money I intend to spend in Europe saved up (about $1000).

    My question is, how do I track and understand the value of the dollar to these currencies, in order to obtain the best value? If my spending power would likely decrease in early fall, should I convert my money now -- or wait until September? Can anyone direct me to a website from which I can watch these factors?

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    Banned Melonie's Avatar
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    Default Re: when should I trade my currency?

    well there are really two different issues that you are talking about ... the 'spot' exchange rate, and the 'official' exchange rate. You can check the 'official' exchange rate of just about any currency in the world at . As to the 'spot' exchange rate, this will depend on what sort of financial institution you use to actually convert currency, whether they charge a flat fee or an embedded percentage as a service charge.

    In truth, with only $1000 involved, your currency exchange options are probably going to be somewhat limited in terms of Euros and virtually non-existant in terms of Slovenian Tolars.

    As to 'predicting' the future direction of the US$ exchange rate versus the Euro, some of the smartest and richest professional investors in the world have bet billions against the US$ ... and have lost money in the process. Analysis of financial fundamentals indicates that the US$ has nowhere to go but down, but the currency markets run on lots of other factors besides fundamentals i.e. central bank manipulation, unsettling world events, hedge fund actions etc.

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    God/dess montythegeek's Avatar
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    Default Re: when should I trade my currency?

    As Melonie said your options are limited on $1K. But you can effectively buy some insurance.
    1 Prepay major bills like hotels. It converts an uncertainty to a certainty.
    2 Buy some insurance in the form of buying 250-300 Euros now. 300 Euros is about $360 today--250 is about $300. Call the biggest bank around (or an international one if there) you and find out what it costs and the rate, then call AAA right after and find out from them.
    When you get to each country get somee small amount of local currency at an ATM machine. A Euro in either of those countries is going to be like spending a US dollar in Canada--easy. Prolly the same with $'s too, but they see more EU visitors than Americans.
    All you are doing is hedging your bets. Do not aim to make money on it or you could lose your shirt in fees. Trying to nail down the value of a currency on a particular day is like trying to pick your wardrobe for day x 4 months in advance.

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