Personal Finance

When would USD gain strength?

  • Last Updated:
  • Mar 28th, 2011 1:13 pm
Tags:
None
Deal Addict
User avatar
Dec 11, 2003
1804 posts
70 upvotes
Vancouver

When would USD gain strength?

I have 60k of USD. If the exchange rate for USD were to appreciate and becomes 1 USD = 0.93 CAD in the future rather than 1 USD = 1 CAD as of right now, then my lump sum will be worth about $64500. If i were to convert it all to CAD then I will be losing out in potential recovery. But at this rate, looks like US economy will not recover until at least end of 2012. 2 years worth of waiting with no guarantee. If I had 60k and put it into a 3% GIC, that would be $1800 interest per year. Would taking my USD cash out be better than waiting?

And I would likely need the cash in CAD within a couple of year for a home downpayment soon.

TIA

edit: rewording inbold

turns out I fail in math >_<

1 CAD = 0.93 USD is what I really wanted to say :)
spot finder
11 replies
Member
Nov 16, 2004
429 posts
11 upvotes
Big Brother wrote: I have 60k of USD. If the exchange rate is 1USD = 0.93, then my lump sum is worth about $64500. If i were to convert it all to CAD then I will be losing out in potential recovery. But at this rate, looks like US economy will not recover until at least end of 2012. 2 years worth of waiting with no guarantee. If I had 60k and put it into a 3% GIC, that would be $1800 interest per year. Would taking my USD cash out be better than waiting?

And I would likely need the cash in CAD within a couple of year for a home downpayment soon.

TIA

not $64,500
i think it's more like $55K+

time to pull out calculator :eek:
Deal Addict
User avatar
Sep 26, 2007
3960 posts
146 upvotes
SC
Big Brother wrote: I have 60k of USD. If the exchange rate is 1USD = 0.93, then my lump sum is worth about $64500. If i were to convert it all to CAD then I will be losing out in potential recovery. But at this rate, looks like US economy will not recover until at least end of 2012. 2 years worth of waiting with no guarantee. If I had 60k and put it into a 3% GIC, that would be $1800 interest per year. Would taking my USD cash out be better than waiting?

And I would likely need the cash in CAD within a couple of year for a home downpayment soon.

TIA

if the exchange rate is 1 USD = 0.93 CAD
then your 60k USD = 55.8K CAD

Under your assumptions about the movement of the USD both cases remain about the same.
if you keep your usd in a gic you earn 3% /year
if you convert, you pay another exchange fee.

imo if you're a currency speculator then keep it in usd. if i had some usd i wouldn't bother to convert it back, i'd probably use it to buy some usd stocks.
if the usd have no actual value to you then you might as well as convert it back.

with regards to guessing how well the usd will do against the cad, nothing is certain.
"We don't have a soul... We are a soul. We have a body." ~C.S Lewis
Deal Addict
User avatar
Dec 11, 2003
1804 posts
70 upvotes
Vancouver
Oops what I meant is if the exchange rate were to appreciate and becomes 1 USD = 0.93 CAD in the future rather than 1 USD = 1 CAD as of right now.
spot finder
Deal Addict
User avatar
Sep 26, 2007
3960 posts
146 upvotes
SC
Big Brother wrote: Oops what I meant is if the exchange rate were to appreciate and becomes 1 USD = 0.93 CAD in the future rather than 1 USD = 1 CAD as of right now.

nah dude that's less... that's depreciate
"We don't have a soul... We are a soul. We have a body." ~C.S Lewis
Deal Expert
User avatar
Jun 14, 2003
23140 posts
202 upvotes
Big Brother wrote: I have 60k of USD. If the exchange rate for USD were to appreciate and becomes 1 USD = 0.93 CAD in the future rather than 1 USD = 1 CAD as of right now, then my lump sum will be worth about $64500. If i were to convert it all to CAD then I will be losing out in potential recovery. But at this rate, looks like US economy will not recover until at least end of 2012. 2 years worth of waiting with no guarantee. If I had 60k and put it into a 3% GIC, that would be $1800 interest per year. Would taking my USD cash out be better than waiting?

And I would likely need the cash in CAD within a couple of year for a home downpayment soon.

TIA

edit: rewording inbold
Big Brother wrote: Oops what I meant is if the exchange rate were to appreciate and becomes 1 USD = 0.93 CAD in the future rather than 1 USD = 1 CAD as of right now.

It is still wrong. If 1 USD = 0.93 CAD, your 60K USD worth 60K x 0.93 = CAD $55800.
Too many people spend money they haven't earned to buy things they don't want, to impress people they don't like. -- Will Smith
Growing older is mandatory. Growing up is optional.
Stay hungry, stay foolish.
Newbie
Sep 6, 2010
36 posts
1 upvote
St. John's
I think what you mean to say is 1 CAD = 0.93 USD or 1 USD = 1.075 CAD.

I would wait 2 years rather than putting it in a GIC, the upside is much greater.
Deal Guru
Sep 2, 2008
12614 posts
2318 upvotes
qwerty3 wrote: I think what you mean to say is 1 CAD = 0.93 USD or 1 USD = 1.075 CAD.

I would wait 2 years rather than putting it in a GIC, the upside is much greater.

Yeah I would wait, but you can still invest your money while it is in USD. Does not have to be one or the other.
Deal Expert
User avatar
Nov 2, 2003
17118 posts
3872 upvotes
GTA
The smart money is in China... where the Economist is report some returns as high as a few hundred percent return on investment. Not that I would endorse any of that but even if you get only 10% of those ~200%+ returns by investing in infrastructure / banks / telcos, that's still decent money.

Not even a nuclear attack on China can dampen its growth. I think the lowest growth in a bad year was 6% for China...

So bringing this back to the topic at hand... if you're looking for good returns, I don't think US is the place for it. Canada will give you average returns if you invest smartly. But if you're looking for big money, it's not in US/Canada.
Deal Addict
User avatar
Dec 11, 2003
1804 posts
70 upvotes
Vancouver
Thank you for reading my mind (despite what I have written).
spot finder
Banned
May 20, 2008
227 posts
13 upvotes
Ontario
Big Brother wrote: I have 60k of USD. If the exchange rate for USD were to appreciate and becomes 1 USD = 0.93 CAD in the future rather than 1 USD = 1 CAD as of right now, then my lump sum will be worth about $64500. If i were to convert it all to CAD then I will be losing out in potential recovery. But at this rate, looks like US economy will not recover until at least end of 2012. 2 years worth of waiting with no guarantee. If I had 60k and put it into a 3% GIC, that would be $1800 interest per year. Would taking my USD cash out be better than waiting?

And I would likely need the cash in CAD within a couple of year for a home downpayment soon.

TIA

edit: rewording inbold

turns out I fail in math >_<

1 CAD = 0.93 USD is what I really wanted to say :)
Buy gold and silver ... something like CEF.A on the TSX. Sell it within your two-year timeframe when gold breaks through $2000. Your return will dwarf any fixed income vehicle.

Do your homework as only you are responsible for your money.

Top