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Old 03-14-2015, 08:42 AM   #21
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Like every other financial institution, the GS projection is sell-side recency, just projecting into the future the past few months. Here's what they said about the Euro 6 months ago U.S. Dollar Will Achieve Parity With Euro by 2017, Says Goldman - MoneyBeat - WSJ
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The euro is on its way to parity with the dollar by the end of 2017, say analysts at Goldman Sachs Group Inc
./.
In six months, Goldman predicts the euro will drop to $1.25. In 12 months, it will be at $1.20. The single currency should hit $1.15 by the end of 2015, and $1.05 one year later. By 2017, the euro will hit parity for the first time since 2002, the year it entered circulation as a physical currency.
Future exchange rates are unknown and cannot be predicted. My experience, from living abroad almost half my life: if you know you have a future need in a specific currency, and you find an opportunity to get the currency at a "good" price, then buy it, then forget about it, you now have one less worry. Trying to get the "best price" isn't worth the effort, you will only waste countless hours of your life trying, worrying and stressing.
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Old 03-14-2015, 08:58 AM   #22
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Like every other financial institution, the GS projection is sell-side recency, just projecting into the future the past few months. Here's what they said about the Euro 6 months ago U.S. Dollar Will Achieve Parity With Euro by 2017, Says Goldman - MoneyBeat - WSJ
Future exchange rates are unknown and cannot be predicted. My experience, from living abroad almost half my life: if you know you have a future need in a specific currency, and you find an opportunity to get the currency at a "good" price, then buy it, then forget about it, you now have one less worry. Trying to get the "best price" isn't worth the effort, you will only waste countless hours of your life trying, worrying and stressing.
FXE then. That looks to be the cleanest option by far.
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Old 03-14-2015, 09:10 AM   #23
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BTW nothing stops you from opening bank account in for example Spain and wiring money from US into that account.
Spain may be different but since FATCA came into force it is usually very difficult for US citizens without residence in the foreign country to open foreign bank accounts since the banks don't want to deal with all the extra reporting requirements.

ETA
I have a UK bank account and just transferred some money there for our trip next year as the pound is also very low against the $
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Old 03-14-2015, 09:44 AM   #24
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We'll see. Europe is really struggling with deflation right now.

If lower exchange rates (easier on exporters) and increased tourism jump starts the European economy, it will be better for all of us.

But I never understood the old ~1.4 relationship between the Euro and USD anyway.
IIRC, the euro was about $1.16 when it first started being used.
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Old 03-14-2015, 09:53 AM   #25
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It went to parity for a while too.
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Old 03-14-2015, 10:26 AM   #26
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Why not short the DB currency euro ETF. Close out your position ahead of travel.
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Old 03-14-2015, 11:16 AM   #27
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I am very comfortable dealing with currency and exchange rate aspects of investing in our portfolio. My question is related to non-investment "1099 free" personal spending.

As Alan points out, a foreign bank account involves FATCA, so it's not an option for us.

Gumby raises an interesting question about tax. I know that exchange transactions for personal use are only taxable when the gain exceeds $300 (per transaction), I believe (but would need to confirm) that translation gains are not deemed income when the currency is held for personal use. The problem with Everbank is, by design, it is 2 transactions (buying, then selling), so it gives me revalued $$ along with a 1099. It's still an option, though.

I've looked around for prepaid Euro debit cards. They do exist, but the fees are very high. Travelex (here) seems very popular around the travel forums, no ATM fees, but they charge 5.5% for the currency exchange. At that rate I'd rather just buy and hold the cash. Prepaid Euro debit cards seem very popular in England. I'll keep looking.
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Old 03-14-2015, 12:06 PM   #28
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So, MichaelB - what about using the FXE etf? Seems like the issue would only be capital gains (or losses) realized when selling - i.e. converting back to USD.

Travelex is horrible. 5.5% is as bad as ordering Euros from Bank of America.
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Old 03-14-2015, 12:27 PM   #29
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So, MichaelB - what about using the FXE etf? Seems like the issue would only be capital gains (or losses) realized when selling - i.e. converting back to USD.
The gain is a big issue, but not a showstopper, and as you point out, it could be a loss, which other options don't offer. FXE tracks nicely, "only" charges .4%, doesn't throw off any taxable income. It's an option, definitely.
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Old 03-14-2015, 12:33 PM   #30
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The gain is a big issue, but not a showstopper, and as you point out, it could be a loss, which other options don't offer. FXE tracks nicely, "only" charges .4%, doesn't throw off any taxable income. It's an option, definitely.
Until the tax, which is only on the gain, exceeds say 5.1% of the total initial investment, you are ahead.
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Old 03-14-2015, 12:49 PM   #31
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Being a bargain hunter, I am interested in FXE, Europe travel or not. However, as I am also a market timer, I am going to wait and watch it.

By the way, FXE used to throw off a bit of dividends but has not in a while. Talk about squeezing blood off turnip when the Eurozone is in deflation and central banks are charging negative interest rates.
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Old 03-14-2015, 12:51 PM   #32
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I would go to my credit union and buy euros (at near spot prices) and hold the physical currency. I would lose out on about 0.5% interest after taxes, but any gains in the forex would also be tax free.
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Old 03-14-2015, 01:08 PM   #33
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Spain may be different but since FATCA came into force it is usually very difficult for US citizens without residence in the foreign country to open foreign bank accounts since the banks don't want to deal with all the extra reporting requirements.

ETA
I have a UK bank account and just transferred some money there for our trip next year as the pound is also very low against the $
I have relatively large account in EU and I am not a resident of any EU country.

Personally even though we spend 6-7 weeks a year in Europe I don't care if Euro is 1 USD or 1.5 USD. But I would care if buying 150k property

Maybe I would care more if spending 5 months a year in Europe....
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Old 03-14-2015, 01:27 PM   #34
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I have relatively large account in EU and I am not a resident of any EU country.
I am in the same situation, never been resident in any EU country since 1987 but I opened my bank account before the recent FATCA regulations came into effect. I really do think it will be very difficult these days to open an account in an EU country if you are a US resident.
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Old 03-14-2015, 02:57 PM   #35
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I would go to my credit union and buy euros (at near spot prices) and hold the physical currency. I would lose out on about 0.5% interest after taxes, but any gains in the forex would also be tax free.
I wish that were an option for me. I'd so do it!

Or at least I'd get cash before a trip.
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Old 03-14-2015, 03:14 PM   #36
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You should be able to open up a euro account with your bank, and just transfer whatever USD you want to that account. No need to open up a account in a foreign country.

Not all banks support it though (typically discount/on-line banks don't).

Both my broker and bank support USD accounts for example (I live in the eurozone) - broker does it for free, local bank charges 50$ a year or so to maintain the account.

[Edit: found this one, maybe check it out? https://www.everbank.com/currencies/access-deposit]
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Old 05-14-2015, 09:26 PM   #37
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Being a bargain hunter, I am interested in FXE, Europe travel or not. However, as I am also a market timer, I am going to wait and watch it.

By the way, FXE used to throw off a bit of dividends but has not in a while. Talk about squeezing blood off turnip when the Eurozone is in deflation and central banks are charging negative interest rates.
The euro is now up to US$1.14, and it was at $1.05. That's 9% rise. Well, I miss the boat, lousy market timer that I am.
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Old 05-14-2015, 09:34 PM   #38
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Yeah - darn it! And we leave for France soon. Stay down, stay down Euro!!!!
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Old 05-18-2015, 03:59 PM   #39
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I'm in the same boat, leaving in September so I have a little time to wait it out. Big gamble of when to purchase Euros, and yes I might be to late! Last October when we went the rate was something like 1.33.
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Old 05-18-2015, 04:44 PM   #40
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This exchange rate dance this year is getting hard to keep track of for me, especially with the stock market doing its thing as well.

Depending on accounting in USD or EUR I had a stellar or an ok year so far.

In addition, currently have expenses in EUR yet am thinking about moving outside the eurozone in the mid-term.

Best case scenario for me is for the NZD/EUR to drop quickly, I'm planning to go there in December or January
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