Exchange Rate Gamble 2019

It's that time of year for me again. When do I exchange my Canadian pesos (as coilman would say) to buy my U.S. dollars for the upcoming March Break trip?

The Canadian dollar has improved against the US over the course of January and thanks to your US Central Banker's decision to hold interest rates steady it got a nice bump at the end of the month. xe.com has the current exchange at $1.30912 Canadian for $1 US. We started out January at almost $1.34 Canadian for $1 US.

Banks and my credit cards charge a 2.5% foreign exchange fee. There is a currency specialist outfit in town that charges 1.6% so effectively I'd be buying US dollars at $1.329 Canadian. My wife has a special credit card that doesn't charge the fee and we use that for hotel/food/other expenses while we're down there, but you get the spot exchange rate for the day.

So do I pull the trigger and buy my gambling dollars now? Hedge by buying some portion now and the rest just before the trip? Or wait until just before the trip in the hopes that the exchange rate gets even better?

--helpmespock

Unless you know something the rest of the world doesn't, your guess is as good, or bad, as anyone else's.

When I get Canadian 'pesos', if I happen to win at the casino I don't change them back into US dollars. I'd recommend you keep next trip's worth of US dollars in dollars if you are lucky enough to come home with any....

It's not so much a matter of when, but a matter of where. Using Canadian money can be an AP play in certain places. Snoopy's brother Spike runs a service plaza in Arizona that takes Canadian money at par for US. A few other places( non-casinos) do the same.

Quote: helpmespock

It's that time of year for me again. When do I exchange my Canadian pesos (as coilman would say) to buy my U.S. dollars for the upcoming March Break trip?

The Canadian dollar has improved against the US over the course of January and thanks to your US Central Banker's decision to hold interest rates steady it got a nice bump at the end of the month. xe.com has the current exchange at $1.30912 Canadian for $1 US. We started out January at almost $1.34 Canadian for $1 US.

Banks and my credit cards charge a 2.5% foreign exchange fee. There is a currency specialist outfit in town that charges 1.6% so effectively I'd be buying US dollars at $1.329 Canadian. My wife has a special credit card that doesn't charge the fee and we use that for hotel/food/other expenses while we're down there, but you get the spot exchange rate for the day.

So do I pull the trigger and buy my gambling dollars now? Hedge by buying some portion now and the rest just before the trip? Or wait until just before the trip in the hopes that the exchange rate gets even better?

--helpmespock

I think you should wait a little. Take it from someone who wanted money NOW(At the time) and sold some share of my stock when it was actually down. I made like $500 when had I waited for it a little later climb very high I could have cashed out $600. So, my advice to you is to wait a little longer and hope it gets a higher value.

Quote: Nathan

I think you should wait a little. Take it from someone who wanted money NOW(At the time) and sold some share of my stock when it was actually down. I made like $500 when had I waited for it a little later climb very high I could have cashed out $600. So, my advice to you is to wait a little longer and hope it gets a higher value.

It just as easily could have gone down, your logic is flawed. You’re being results oriented.

(a) In the UK I have a credit card and a debit card that charge no comission when used abroad. The first can only be used for goods and the latter used for cash. Thus it's worth looking into whether there's a bank that has this (if they charge a monthly fee then it might not be worth it). If you need a larger quanity of cash for day one (more than an ATM can give) then it might be worth getting some ahead of travelling.
(b) As has been said I'd keep a float of USD.

Personally I don't change money back at all and probably even have old US notes (before the larger faces came in). I go to the ATM to fill up my float on the first and last days. The only problem I have is the Swedish notes as it's beginning to go cashless!

If I'm only on a short visit then I buy a small quantity back here (usually M&S) - it's worth shopping around and never use the airport.

Which way is the price of oil going to go the next month?
It was up about 20% in Jan and the Canadian Peso followed

The two places in Windsor I use for buying my greenbacks are

CBCE and the exchange place located in the train station....both are usually about 3-4% cheaper than the banks

https://windsorstationcurrencyexchange.com/

showing 1.3176 for todays exchange rate

CBCE is no longer showing their exchange rates but I think the train station is the same company as the converter is exactly what CBCE used to have on their site

https://canamcurrencyexchange.com/

If you are in Windsor the best exchange rate we have found is right at the Caesar Windsor caino. I bought some on January 25th and 100 Canadian bought me 74.50 US. However the dollar is higher now so you should do better. I was also told you can no longer buy at the train station. (not sure if this correct)

Quote: SOOPOO

Unless you know something the rest of the world doesn't, your guess is as good, or bad, as anyone else's.

When I get Canadian 'pesos', if I happen to win at the casino I don't change them back into US dollars. I'd recommend you keep next trip's worth of US dollars in dollars if you are lucky enough to come home with any....

I do have a US dollar account that I put my leftover bankroll in from last year's trip. I had about $700 leftover last year, but I used up about half of that getting some cash out for a trip to New York City in the Fall. I'll roll the leftovers (or winnings!) into the account again for the trip in 2020.

Quote: billryan

Using Canadian money can be an AP play in certain places.

Yes I was aware of one of those deals at a downtown hotel casino a few years ago, but you had to be staying there, there was a daily limit on exchange, and it didn't count for table games so it was less useful to me.

Quote: billryan

In the UK I have a credit card and a debit card that charge no comission when used abroad.

I mentioned above that my wife has one of these no commission charge cards that we use for purchases. It's the Home Trust Preferred Visa card for the Canadians that are interested in applying for one. You're paying the spot exchange with the card so if the exchange gets worse during the trip you're out of luck.

Quote: coilman

CBCE and the exchange place located in the train station....both are usually about 3-4% cheaper than the banks

showing 1.3176 for todays exchange rate

Wow nice! That's better than what I can get, but I suspect because you're on the border that there is a fair amount of competition for exchange. I'm 3 hours up the 401 from Windsor so unfortunately that's not an option.

--helpmespock

If Trump shuts down the government again, I have to imagine people will be fleeing the US dollar by mid-March. Will that make the Canadian dollar stronger? Heck, the US airports might be shutdown nationwide.

Quote: ChumpChange

If Trump shuts down the government again, I have to imagine people will be fleeing the US dollar by mid-March. Will that make the Canadian dollar stronger? Heck, the US airports might be shutdown nationwide.

I don't know how much effect there was from the government shutdown on US/CDN exchange.

From my perspective, interest rate differential between the two countries seems to have the most effect. Hence when your Central Bank held off on rates the Canadian dollar rose.

As coilman points out, the price of oil affects us too as it is our biggest export. When oil prices were sky high back in 2014 they called the Canadian dollar a "petro dollar", but the correlation between the price of oil and our dollar isn't always strong.

--helpmespock

Well I'm gambling now. The exchange rate has changed $0.02 for the worse. My $1500 US will cost me $2021 CDN instead of $1990 if I would have bought on Monday.

I might as well wait it out now and see what the exchange rate does.

--helpmespock

Not sure they still do it, but Akwesasne Mohawk Casino in very upstate NY had tables with 2 sets of chips. If you bought in US, you got US chips. If you bought in Canadian, you got Canadian Chips.

Yup. they still have it....

https://mohawkcasino.com/promotions/canadian-special-promotions/

When you cashed out, you got your same currency back. No need to exchange money at all.

Not sure what they did with Slots though.

This was in the late 1990s, so it may very well be different now.

Holy crap, I just checked their website and they have Caribbean Stud (and Let it Ride). Maybe it is still 1990 there.

https://mohawkcasino.com/gaming/table-games/

There is no reason for $Cdn to get better in February. Interest rates are stable. There are no world tensions to put oil prices higher. The US economy is still trucking. Buy now.

Quote: boymimbo

There is no reason for $Cdn to get better in February. Interest rates are stable. There are no world tensions to put oil prices higher. The US economy is still trucking. Buy now.

I disagree about oil. There are several touchy situations that could flare up.

Venezuela is in complete chaos.

Saudi Arabia is still clobbering Yemen and the US Congress is preparing measures (censure /sanction) around that.

Troop withdrawals/stalling/uncertainty in the Middle East.

All of that makes Canadian Oil stronger. And so, probably, CDN $.

Obv I could be wrong.

Forward curve says buy now.

http://fx.sauder.ubc.ca/CAD/forward.html

Well I got scared and I got two thirds of the bankroll locked in at 1.33740 yesterday which turns out to be a dip. It's up to 1.34276 today at my local currency shop.

I'll wait it out now until March 1st to see what that brings.

--helpmespock