Euro @ 1 to $1.24

[Slide Panda]

i look to http://www.xe.com/ more - seems to line up better with what the news tells me at least. But of course the banks rates will differ some.

And no... prices of goods in the US will not drop for some time, and only if this sort of exchange rate stays in place for a while. All (or a whole lot of) the goodies in the US right now were purchased while the Euro was higher, and I really wouldn't expect US retailers to suddenly want to take a bath by hacking their prices of goods already in inventory. This might just be a blip, and they can't go knocking prices down 25% if it is.

But... As Cyrus said... buying power is on our side for now. Time to leverage if you can.

[muskrat]

buying power in terms of hotel, food and travel of course.  I check the overnight treasury weekly and I think Germany will withdraw from the Euro, or at least I hope.  If so, we will be buying products for Chinese prices.  Too bad many will suffer but turning over control on a rotating schedule is a BAD idea especially with the history in that part of the world.  Just my pennies.

[DoubleEagle]

Depends a lot on what happens to Spain, Portugal, and Italy and Germany's willingness to bailout those debt ridden economies .

Dolph

[cyrus buelton]

EUR is going back up against the dollar.

All my trades were around 1.28148543 USD to 1 EUR.



I booked some forward contracts today, so I'll let you know what Citi thinks the EUR will be doing in 6+ mons.


Always a good indicator.

[muskrat]

I think the Euro was a great idea in concept but implementation has been poor.  Without getting into politics I believe the indicators will be the outcome in Greece, Italy and Spain. 

[swampduc]

EUR is going back up against the dollar.

Already?! Crap!

I'd appreciate the prediction from Citi. I'm planning on going to Europe in August. Any feelings on whether Greece will have settled down by then?

[cyrus buelton]

I think the Euro was a great idea in concept but implementation has been poor.  Without getting into politics I believe the indicators will be the outcome in Greece, Italy and Spain. 

For an EU Country to go on the Euro is pretty complicated. Many factors contribute to the decision. I wouldn't really call it political at all; it is economic.

Most of the factors involve interest rates staying at a steady rate for xx amount of time; I took a class on the EU when I lived in Ireland in 2002 and can't recall all the stipulations, but mostly centered around the financial market in the country becoming stable.

Already?! Crap!

I'd appreciate the prediction from Citi. I'm planning on going to Europe in August. Any feelings on whether Greece will have settled down by then?

Ok, looking right now as my trades fixed at 1600 GMT on the London Stock Exchange (just any FYI in case some didn't know, but you can't hold foreign currency accounts in the United States. All of my accounts <CAD, JPY, EUR, GBP, SEK, AUD, and ZAR are held in London via Wachovia/Wells, but we use Citibank for our forward contracts>)


Rather interesting:

My contracts that I booked are about 12 months out, so I've locked my rates in.

Citi's current spot rate today in London was 1.23720 USD to the EUR.

Rather interesting what the rate we get at a US Based Bank fixing off the US Markets verse a European Market.

or

Wells Fargo just has shitty rates and not a lot of movement occurred yesterday, driving the rate up based on a lower volume. Who knows. The currency game is weird.

anyway, here are the forward rates I got with the dates:

26/04/2011 - 1.240614 (Forward Points:   0.003414)
23/05/2011 - 1.240320 (Forward Points:   0.003120)
20/06/2011 - 1.240830 (Forward Points:   0.003630)

Also did a EUR/USD SWAP today and got the following:

Near Outright Rate: 1.237300
Far Outright Rate: 1.240149
Far Value Date: 21/03/2011

(Swap basically means that I don't have enough EUR right now in my account to settle an existing contract due to cash flow problems, so you essentially swap out the hedge for a later date. So instead of me selling (sending) Citi EUR to buy (deliver to my account) USD, I am doing the opposite. I am paying them in USD and they deliver me EUR to my account.

Then on the date above, I owe them the far value of the hedge.

If anyone needs an explanation of the above language, I'll be happy to explain, but it will require a minimal fee sent to my paypal: Iamamake the beast with two backsingterribleripoffneighbor@darthvader.com

[Slide Panda]

What's your thoughts now Jud? XE is reporting $1 to 1.22 at the moment. Just a dip or will the euro see a bit more decline?

[cyrus buelton]

What's your thoughts now Jud? XE is reporting $1 to 1.22 at the moment. Just a dip or will the euro see a bit more decline?

I'm getting my oil changed right now and don't have my Security Token for Wells Fargo so I can't get a real rate right now.


I think it depends on what happens on the economy of Europe due to the Greece factor.

If shit keeps going bad, I think it will continue to decline until they have some sort of bailout package, but then, it isn't an instant rise.


I am liking the decline since I'll be in Germany in July and about to start booking rooms. Glad I didn't book a few months ago as I'd get hosed on the rate at the time!

This lady at work is a moron and hedged Euro's for a trip to Italy this Fall from her local bank.

She thought she was being all sly and slick (she thinks she understands hedging....which she doesn't) and would lock a rate in instead of doing what most logical people do and use an ATM to get the bankrate at the time.

Essentially she was playing a currency roulette game with the stock market, not currency hedging in the sense we do at work. Only reason we hedge is to know what your cash flow will be on a given day of the month pushed out for a year. Sure, we have FX gains and losses, but you can better anticipate your cash flow this way.

Too bad her rate locked in at 1.33 USD to the EUR.

[Slide Panda]

I am liking the decline since I'll be in Germany in July and about to start booking rooms. Glad I didn't book a few months ago as I'd get hosed on the rate at the time!

Hope you're right. Me and the GF are looking at Germany in sept, so the debate is exchange some greenbacks now in the event it goes up again... or ride the gamble. Right now the default stance is ride, since neither of us has jumped into gear about actaully exchanging any money

[cyrus buelton]

Hope you're right. Me and the GF are looking at Germany in sept, so the debate is exchange some greenbacks now in the event it goes up again... or ride the gamble. Right now the default stance is ride, since neither of us has jumped into gear about actaully exchanging any money

Wells just clocked me in on a spot transfer at 1.26445950


I'd have a Citibank Rate out of London, but my EUR account only has 7k EUR, so not worth putting in a spot contract to move the cash over here for month end.

My guess their spot rate is similar to what I had before, probably in the 1.24 range.

[Jaman]

Euro just broke 1.22 - parity is a matter of when not if...

[cyrus buelton]

Euro just broke 1.22 - parity is a matter of when not if...

Depends on what market indicator you are using and a consumer getting that rate is not possible.


You get the rate your credit card company uses or your bank.


Right now the rate you will get is about 1.26 USD to the EUR


Also, don't forget to tack on 3% if using a credit card.........they charge a surcharge that is a hidden fee.

[Raux]

Germany is working some legislation to stop speculators, keep your eye out.

[cyrus buelton]

Germany is working some legislation to stop speculators, keep your eye out.

Can you elaborate on that or post up a link to an article?


speculating as in they won't trade currencies on their stock exchange or won't allow banks within their country to hedge currency?


Currency hedging is used not as a speculation to save $$, it is used as a forecasting tool so you know exactly how much USD, EUR, MXN, etc you are getting at a certain part in time.


It is huge in the airline industry with contracts.

Say Boeing is selling xx planes to a carrier and the payment is coming in the form of, say, Euro's in 4 years.


Boeing more than likely will enter into a FX Contract set out 4 years when that payment is due so they can have a hard forecast on what to expect.

Sure, you can win and you can lose. That's what FX gain/loss on the balance sheet is all about.