Conachair
regular
Reged: 24/01/2004
Posts: 544
Loc: Canaries
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Though far off in the distant future I might even go across the atlantic within the next year, assuming that to be so what's the best currency to have? Luckily I should have enough to keep me going in a euro account which got there before the rate dropped. Also have GBP and dollar accounts, dollar/pound/XCD seems to be pretty stable so I'm thinking leave what's left in GBP or dollars. Any thoughts from you lot out there? Or general hints on what's handy to have, I've always found dollars in cash go down well pretty much anywhere if your stuck, is that the case in the Caribbean?
Ta
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Bajansailor
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Reged: 27/12/2004
Posts: 2293
Loc: Barbados (East coast)
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US$ are welcome everywhere in the Caribbean.
However the Euro seems to have 'gone up' in relation to the US$, so might be a good idea to keep your Euros as Euros, and then just change them in a bank out here for local currency as and when required?
The Barbados and Eastern Caribbean dollars are both linked to the US$, so we really notice it if we travel to Europe, or even just when buying anything in GBP or Euros.
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Lemain
regular
Reged: 31/01/2004
Posts: 5976
Loc: Fiumicino canal (Rome, Italy)
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The honest answer is that nobody knows what is going to happen next - it is little more than a guess. USD is due for a bounce on technicals alone but the fundamentals are terrible. EUR is holding up due to very firm statements from the ECB about keeping interest rates high. Most observers don't believe that can last for long.
My personal view is that the value (i.e. spending power) of most currencies is going to fall at an astonishingly high rate. Don't confuse this with 'inflation' - we are talking about price rises with economic deflation, a truly dreadful combination. Unless you decide to put some of your cash into assets such as commodities, precious metals, or whatever, then you can't do much worse than you propose - keep a balance of USD/GBP/EUR and spend whichever is working best for you at the time. The exchange rates between those three will probably trend back to the 200 day moving average from time to time. The worrying thing for you will be erosion of spending power due to devaluation of the currencies.
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My daily blog on the current financial crisis is at:- http://davidscompass.blogspot.com No PMs for now ybw1.20.lemain@spamgourmet.com
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LadyJessie
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Reged: 21/11/2006
Posts: 1150
Loc: the Med
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The euro is presently very rapidly taking over the dollar's old role as 'world currency'. I just came back from SE Asia that used to be a very US dollar dominated area, but the euro has now taken over that role and you will have more problems getting rid of your dollars there than the euro.
However, if you are heading for the Caribbean; that is still very US dollar dominated, except for the obvious euro areas of Martinique and St Maarten.
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Conachair
regular
Reged: 24/01/2004
Posts: 544
Loc: Canaries
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Thanks, Bajansailor. What about day to day, do you have a local account? Can you stick a european visa card into a hole in the wall and get out beer vouchers? I'm assuming yes as Morocco was no problem. Maybe not best exchange rate though.
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LadyJessie
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Reged: 21/11/2006
Posts: 1150
Loc: the Med
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Quote:
EUR is holding up due to very firm statements from the ECB about keeping interest rates high. Most observers don't believe that can last for long.
Lemain, I think you got it wrong again. The euro interest rate is actually significantly lower than the British Pound rate and it has always been that way. It is presently higher than the US rate, but that is because the US Fed has had to make recent 'emergency drops' to shore up their ailing money market. The trailing euro rate is still lower than both the GBP and the USD.
What does this mean for the future of these currencies? Well, there is very good saying: 'forecasting is very difficult, especially if it involves the future'. My two cents worth here is that the euro interest will be comparably stable and the GBP and USD will fluctuate in the near future. This means that I think that the British Pound and the US dollar will continue to be weak, and possibly even weaker, compared to the euro. I am sticking to the euro for my money.
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Richard_Faulkner_M44
regular
Reged: 17/03/2006
Posts: 4587
Loc: Manchester
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Quote:
Can you stick a european visa card into a hole in the wall and get out beer vouchers?
Not a problem in Eustatius, (Statia), or St. Kitts .. I think I drew US $, rather than the local currency.
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Rogue - Moody 44
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KellysEye
regular
Reged: 23/07/2006
Posts: 759
Loc: Bonaire
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Everywhere in the Caribbean will acept US dollars cash. If you offer Euros cash anywhere other than the French/Dutch islands they will normally refuse it (I'm not even sure some of them know what it is).
In our experience every non-European island has a fixed rate against the dollar. ATM's are no problem for UK cards, whether they are for pounds, dollar or euro acounts. A few island ATM's will offer dollars or local currency (it's not normal though). If you are moving on quickly (and not going back) take dollars if you can.
If you move around islands expect the card(s) to be stopped occasionaly. The banks aren't used to people moving around much. After a year or two they get the message.
If you head to Venezuela definitely take dollars, the black market exchange rate is roughly twice the official rate.
Edited by KellysEye (25/04/2008 01:32)
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Lemain
regular
Reged: 31/01/2004
Posts: 5976
Loc: Fiumicino canal (Rome, Italy)
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The ECB has always had lower base rates than the UK because of differences in the markets between UK and the major EU economies of Germany and France. The ECB has decided not to cut rates while the BoE and the Fed have made dramatic cuts. Leaving aside the intrinsic worth of the currencies (which is impossible to value) the relative change in interest rates has caused the EUR to strengthen relative to the USD and GBP. Do not be fooled into thinking that the EUR is actually a stronger or safer currency, it is not. Major industrialists in Germany have started breaking ranks, calling for the ECB to cut rates. When they do - WHEN they do - the EUR will correct.
EUR/GBP and EUR/USD have been a good ride and holders of the EUR have done well, but like any other major currency pairs they will correct for technical reasons if nothing else. If I could predict exactly when this will happen and the amount of the pullback, I would be dictating this message, not typing it but watch out for a steep correction at any time.
A downward correction does not cause a problem for small cash reserves in a currency that you use for daily purchases - if you live in Euro land you will need Euros so no harm done. However, if you are looking for an appropriate intermediate currency, which is what the OP is asking for, then the answer is much more complicated. Since he will not be spending, in the main, USD, GBP or EUR in the shops, businesses and boatyards if he transfers his funds to EUR at this time he will be converting his (weak) GBP and USD into (very strong) EUR. I think he could end up with large quantities of egg on his face and much less food on his table, which is why I suggested to him that he might consider keeping a selection of the three currencies he already holds, in the same proportions.
The issue of producer nations (commodities and manufactured products) converting from USD to EUR is more political than economic although the recent strength of the EUR gives the opposite impression. I don't think that the EUR stands a snowflake in hell's chance of being the next reserve currency. Something will be cobbled together involving the IMF and probably gold factored in there somehow, until Chindia is ready to take up the baton, in the next ten to twenty-five years.
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My daily blog on the current financial crisis is at:- http://davidscompass.blogspot.com No PMs for now ybw1.20.lemain@spamgourmet.com
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Conachair
regular
Reged: 24/01/2004
Posts: 544
Loc: Canaries
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Quote:
However, if you are looking for an appropriate intermediate currency, which is what the OP is asking for
Thanks, looking at it in the morning I think I just asked "what's the best way to play the currency markets?" But I think all's well as it is & before i head too far off the beaten track a few dollars/euros under the mattress should do for emergancies.
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