A number of savvy US investors have been buying foreign stocks over the last couple of years, earning handsome returns in the process. It was a good decision, especially as the dollar started falling and falling.
Of course, nothing lasts forever, and there is a breath in the air of a change in attitude towards the dollar. This is not without reason, although many think that it is pointless to consider that the dollar should start to appreciate.
The malaise that has plagued the US for some time is beginning to reach the shores of other countries, especially Europe. It was inevitable that America’s problems would affect others. The position of interest rates, the fall in house prices, the lot.
These consequences could be beneficial for the dollar, and those astute US investors may well decide to cut their foreign investments and return to their currency with profits while they can, because an increase in the value of the dollar would reduce their profits. This may be just one reason out of several to start a reversal trend.
For one thing, the British pound in particular has been overvalued, and whatever injection of support it has been receiving, it cannot last forever. In addition, the high position of the euro is not easy to live for much longer.
It is well known that many factors have pointed to the weakness of the dollar, and there are many people who will think that the currency must weaken again in the long term.
It certainly wouldn’t be anything new to see things turn out in a way contrary to the book. The currency game is prone to surprises. However, there are times when surprises, when put under the microscope, are actually events that should have been seen as very real possibilities. Those, with that little extra foresight, may well be tempted to take an early step by siding with the dollar.
So is this the time when the gamble could pay off and start the dollar’s appreciation?
Everyone would like to know the definitive answer to that, and the best way may be to ask the question of whether the dollar has bottomed out.
This is the point where the game part comes in. The answer is not too easy this time. The prize is certainly big, because if caught at the right time, the dollar could make a lot of money. However, if he catches it wrong, how much more could he drop?
So the question is, are we facing the possibility of winning a lot or losing a little? Put that way, it looks like the odds are in favor of taking a chance on the dollar, albeit with fingers firmly crossed.
If you are going to take the step, make sure you receive the best service and the best exchange rates. To do this, make several calls to the different foreign currency exchange companies and select the one that offers you the best offer. Almost without exception, they offer better exchange rates than the major banks and don’t charge extra.
They won’t run away with your money, as they would have nowhere to run without being caught instantly. Your money is sent to your bank and transmitted directly and immediately to your bank.
These days, movements of funds are carefully noted, due to money laundering risks, and all UK companies dealing with any money transfers etc are required to be licensed by HM Revenue and Customs, and show the registration number issued to them, which can be easily verified Similarly, other countries have their own precautions.