US$ or Euros ?

[gene2009]

I have some cash in US$ and Euros. I'd like to spend a part of my money. So, what's better to spend my bucks or my Euros first? I wanted to keep the other part of my money.

[SnerpGoodWord]

The trend is currently towards a declining Euro. To some degree the EU will have to print and spend its way out of the PIIGS crisis, and that will likely hurt their currency further. Also, flight from Euro-denominated assets to dollar-denominated ones will cause people to sell Euros to buy dollars.

I don't have a super strong opinion on this, and only a moderate track record on long term macroeconomic calls, but if I had to guess, I would say spend the Euros.

[Brutha]

The trend is currently towards a declining Euro. To some degree the EU will have to print and spend its way out of the PIIGS crisis, and that will likely hurt their currency further. Also, flight from Euro-denominated assets to dollar-denominated ones will cause people to sell Euros to buy dollars.

Isn't that information already priced into the price of Euros?

[aelle]

Where are you, and how much cash are you talking about? Under a certain threshold, conversion fees will kill any benefit you might make from playing on the currency rates.

Both these currencies are pretty weak right now, but right now, the euro moreso than the dollar. I'd save the euros for when it gets stronger and spend the dollars. But mostly I'm happy I'm etting paid in neither

[gene2009]

Originally Posted by aelle

Where are you, and how much cash are you talking about? Under a certain threshold, conversion fees will kill any benefit you might make from playing on the currency rates.

Both these currencies are pretty weak right now, but right now, the euro moreso than the dollar. I'd save the euros for when it gets stronger and spend the dollars. But mostly I'm happy I'm etting paid in neither

I'm from the Ukraine. Really, i'm talking of 1000 euros and 1000 bucks. No big money

[ssandra]

Personally I feel like the euro is in a stronger position to come back at some point stronger then the dollar is.

But that is just a feeling I have, and maybe wishful thinking because most of our savings are in Euro's

[SnerpGoodWord]

Originally Posted by Brutha

Isn't that information already priced into the price of Euros?

That's the billion dollar question, right?

My opinion is that it's not, and I'll offer two arguments:

1) Certain types of debt crisis price in very slowly. For example, in 2007 the coming mortgage and CDO mess in the US was being discussed in media outlets aimed at the financially unsophisticated (NPR, for example). That's traditionally a sign that price-in is done - "when dentists in Peoria are buying, sell". But the last day where broad market movement was controlled by the US housing crisis was early in March, 2009 - well over a year later. That's some pretty slow price-in. In other words, in certain cases you CAN trade the news even if you initially appear very late to the party.

2) In order for the EUR.USD to price in PIIGS quickly, speculative position traders would have to take short positions similarly sized to the eventual EUR firesale, and then liquidate those positions into the non-speculative economic activity that followed. In other words, a collection of someones would have to go hundreds of billions short the EUR.USD and EUR.JPY. The question is, could and did anyone take that position? Taking into account that the interbank FX market is not transparent at all, my analysis is that no one did, and in fact no one could. The resulting positions would be so huge that no speculative traders could hold them.

So my guess is that the Euro has at least one more decent down leg in it - probably below 1.10. And based on my track record I might be right for the right reasons 65% of the time on this. But it's not something I personally intend to trade.

[themaster]

The euro is falling cause it was built on nothing.. as is our money system is.. the big hints seem to say "stay in gold" etc. but it's really hard to say..

There is no safe market for currency even our US dollar is scheduled to fall.. the world has to be made equal to do that.. you have to take the fear out of the situation.. so fear is coming.. BOO! (not trying to make anyone scared.. this is just information for your consideration )

Honestly, use your intuition and gut.. use your feelings.. that's how you'll stay safe when others are crying about fortunes soon..

[gene2009]

Thank you to all who have answered.
Well, i've decided to spend my bucks first. Simply, my not many customers pay me USD and no euros. So, i'll be able to save bucks up again.
I hope euros won't break

[gene2009]

Originally Posted by themaster

The euro is falling cause it was built on nothing.. as is our money system is.. the big hints seem to say "stay in gold" etc. but it's really hard to say..

I don't think US dollars still have good gold support.

[ar81]

The problem is not the economy. The problem is the market of derivatives. It is 10 times bigger than world's GDP and stock prices are no loger driven by company profits.

Market of derivatives is a casino that produces either losses or debts. Speculation in these markets and unhealthy rumors are causing to exaggerate Europe's crisis before US crisis.

Call it political diversion. Those who bet on sinking Europe do not want to lose money as it would mean more money for them. So they feed the rumors and the herd follows them.

Look who is in bad shape...