So..... the Euro.... uhhh?

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mmmmmbeer
Posts: 917
Joined: Wed May 11, 2016 11:00 am

So..... the Euro.... uhhh?

Post by mmmmmbeer »

So the dollar to euro exchange rate is 1.11 = 1 right now. Pretty even.

If a guy was to buy 5k in euro right now... at 1.11 each. When the fed hikes the rates they're talking about in a month or two. The Euro compared to the dollar heads back up. Exchange those Euros back to dollars at 2.00 bucks a pop... making scads?

Am I looking at this wrong? How does a guy lose money? If you go to your local credit union do they charge an exchange rate?
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evilanne
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Joined: Thu May 14, 2015 6:52 pm

Re: So..... the Euro.... uhhh?

Post by evilanne »

I don't think credit unions typically exchange currency and not all banks do. I know my mother had an account at one bank IOT be able to exchange currency. You need to check with your financial institution to see what fee(s) they charge.

I don't see Euro increasing as much as you seem to believe it might, especially with negative interest rates and continued QE in Europe. Also, not sure what Brexit outcome may be.

see http://fxtop.com/en/historical-exchange ... tnOK=Go%21

RKresearch
Posts: 50
Joined: Thu Oct 25, 2012 9:36 am

Re: So..... the Euro.... uhhh?

Post by RKresearch »

Are you thinking about buying real Euro then Dollars instead of a fund? If you can think of something to base a fund on there probably already are ETFs that you can buy shares in. Just Google "ETF Euro vs Dollar" you will get lots of hits.

mmmmmbeer
Posts: 917
Joined: Wed May 11, 2016 11:00 am

Re: So..... the Euro.... uhhh?

Post by mmmmmbeer »

RKresearch wrote:Are you thinking about buying real Euro then Dollars instead of a fund? If you can think of something to base a fund on there probably already are ETFs that you can buy shares in. Just Google "ETF Euro vs Dollar" you will get lots of hits.


Oh I was thinking like real currency. I got curious because the wife and I are going to Rome and Greece in July for a couple weeks. As I'm sure we're going to see the sites and eat at some good places, as well as buy gifts for the kids for when we get home, I asked my local credit union how I could get several hundred to a couple thousand euros. They told me just to let them know a few days in advance and they'd order them for me. Then I could come in an just exchange. They didn't mention a transaction fee or anything.
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ArrieS
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Re: So..... the Euro.... uhhh?

Post by ArrieS »

mmmmmbeer wrote:So the dollar to euro exchange rate is 1.11 = 1 right now. Pretty even.

If a guy was to buy 5k in euro right now... at 1.11 each. When the fed hikes the rates they're talking about in a month or two. The Euro compared to the dollar heads back up. Exchange those Euros back to dollars at 2.00 bucks a pop... making scads?

Am I looking at this wrong? How does a guy lose money? If you go to your local credit union do they charge an exchange rate?


Uh, if the FED raises rates it will make the dollar stronger against the Euro. So any Euros you hold will decrease in value compared to the dollar.

Think about it, if the FED raises rates and the Euro rates stay low, people will want dollars because they pay more than holding Euros which are currently at negative rates. Making more demand for dollars, making the dollar more valuable.

Everyone charges an exchange rate. Just like stocks, currency is traded as a spread so you sell to them for less than you would buy from them at the currency exchange rate at that moment.

So they won't charge you a straight fee, but if the market exchange rate is 1 Euro equals $1.11, you have to buy dollars at $1.13 or buy Euros at $1.09.
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Jankadank
Posts: 19
Joined: Fri Dec 11, 2015 11:53 am

Re: So..... the Euro.... uhhh?

Post by Jankadank »

I have been holding on to a Euro/Dollar short sale since early 2014 when the EUR/USD was at 1.38...

Just going to ride it out and see how low the euro falls

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ZME_ARTCC
Posts: 29
Joined: Tue Jan 08, 2008 4:43 pm

Re: So..... the Euro.... uhhh?

Post by ZME_ARTCC »

Unfortunately, yes, your thinking is a little off base.
With most counties issuing bonds at a negative and/or 0% interest rate,
a lot of foreigners are buying dollars and/or american stocks and bonds, which are in american dollars, as investments. If U.S. Government bond interest rates go up, that makes them even more attractive to foreign investors and U.S investors. Which means they will be selling their currency to buy ours.
Now, it is all about supply and demand and how quickly they rush to buy New issue U.S. Government bonds at the higher interest rate. If the demand for their currency drops and the demand for ours increases, then the cost of their currency will drop. (i.e. go lower) or the cost, to them, for ours will increase.
With that being said, U.S. Bonds that have already been issued at the lower interest rate will decrease in value. So, even though the "F" fund is for corp. bonds it will drop because it somewhat tracks the U.S. bond market.
Conclusion: As U.S. interest rates rise U.S. bonds will fall, And U.S corp bonds will follow.
Also, historically, the stock market should start to fall, six months to a year after the interest rates start increasing. The higher the interest rates, the lower the markets will go as investors move their money into secure U.S. bonds.
Thank You!

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