What about holding some cash in another currency such as Norwegian Kroner or Swiss Francs? It avoids the hassle of opening an account in a foreign country. And these currencies will presumably be safer in the event of the euro collapsing.
What about holding some cash in another currency such as Norwegian Kroner or Swiss Francs? It avoids the hassle of opening an account in a foreign country. And these currencies will presumably be safer in the event of the euro collapsing.
Anyone got any opinions/downsides to this? I assume an approximate combined 5% hit from exchanging and re-exchanging, plus receiving no interest, but anything else?
Anyone got any opinions/downsides to this? I assume an approximate combined 5% hit from exchanging and re-exchanging, plus receiving no interest, but anything else?
As the fluctuations in the euro and dollar are very frequent and varying, I'd usually avoid changing to dollars.
However, As this discussion has the premise that the euro may fail, Would it make anymore sense in these times to hold dollars? If the euro doesnt fail, The fx risk would be the same as it usually is and often swings up and down, so i think there is some wriggle room. Infact, I think i've made about a 10% increase on dollars ive held this year just due to holidays etc and the fx rates.
If the euro does fail, the dollar would be holding its value alot more than the punt nua no? it may even increase in value as without the euro, im assuming more wealth will be placed into the dollars hands.
I'm pretty noob like when it comes to these things, so i apologise if ive just spoken garbage to all you AAM veterans!
Okay, from above, Id appreciate if someone could confirm the following:
1) FX risk: Is this the risk you take on whether the exchange rate has gone your way, or not, between changing from euro to [foreign currency] and back again at a later stage? If so, then having foreign cash wouldnt be any different to a foreign deposit?
2) Converting to/from euro: Again are the same costs not incurred whether you're converting a cash amount or a deposit balance?
Okay, from above, Id appreciate if someone could confirm the following:
1) FX risk: Is this the risk you take on whether the exchange rate has gone your way, or not, between changing from euro to [foreign currency] and back again at a later stage? If so, then having foreign cash wouldnt be any different to a foreign deposit?
Keeping in mind (1) above, lets work on the assumption that no fluctuation occurs - and if/when you decide to do so - you can change your foreign currency back into euro's again. Based on this assumption, there is still a cost - as the bank you use to convert from euro to other currency - and back to euro - will take their margin on the initial conversion and again - when converting back.