losing money due to currencies equivalence drop [closed]

losing money due to currencies equivalence drop [closed] - American dollar bills and vintage light box with inscription

So, my sister lives in Canada and she travelled to US and change some of her currencies to US currencies(about $100 US). A week later, she went back to Canada and tried to change her US currencies back to Canadian ones. The equivalence of US currencies went down and she lost about ($10 Canadian). I'm wondering if this happened to anyone and lost a lot of money? What did you do?

exchange


Best Answer

This happens. There is not much to do about it once the loss has occurred. It's just a risk that's inherent in exchanging money.

(Most of your sister's loss must have been in fees or buy/sell spread rather than exchange rate moves, because the USD/CAD rate has not moved as much as 10% during the last year).

You can try to minimize your exposure to exchange-rate losses by

  • not exchanging more money that you think you'll need to spend.

  • pay with a credit or debit card when abroad. The card issuer will exchange only the amount you actually spend.

  • if you're often going to the same country, consider keeping your stash of emergency cash from trip to trip instead of changing it back to your own currency when you get home.

  • bring emergency cash in your own currency and exchange it locally only if an emergency that you need to cover arises. Exchanging the money abroad may be more expensive than at home, but in most cases you won't need to (because no emergency).



Pictures about "losing money due to currencies equivalence drop [closed]"

losing money due to currencies equivalence drop [closed] - Tax Documents on the Table
losing money due to currencies equivalence drop [closed] - Dollar Bills Used for Bills Payment
losing money due to currencies equivalence drop [closed] - Tax Documents on the Table


What happens when foreign currency decreases?

a. If the dollar depreciates (the exchange rate falls), the relative price of domestic goods and services falls while the relative price of foreign goods and services increases. 1. The change in relative prices will increase U.S. exports and decrease its imports.

What happens when currency value decreases?

A lower-valued currency makes a country's imports more expensive and its exports less expensive in foreign markets. A higher exchange rate can be expected to worsen a country's balance of trade, while a lower exchange rate can be expected to improve it.

What happens to currency when exchange rate falls?

A fall in the exchange rate is known as a depreciation in the exchange rate (or devaluation in a fixed exchange rate system). It means the currency is worth less compared to other countries. For example, a depreciation of the dollar makes US exports more competitive but raises the cost of importing goods into the US.

Why do you lose money when you exchange currency?

As the price you pay for a currency depends on the day you want it exchanged, you could lose money when you return from your travels. It might be better to hold on to the foreign money and wait until the currency rate has recovered. Don't spend it all just because you think it will be worth nothing when you get back.


What gives a dollar bill its value? - Doug Levinson



More answers regarding losing money due to currencies equivalence drop [closed]

Answer 2

This happens to everyone everywhere when exchanging currencies.

  1. The exchange rates between currencies varies everyday due to many factors. You can "gamble" by exchanging your money when you feel it is advantageous to you (when the rates are high).
  2. Banks (and exchange offices) will buy and sell currencies are different rates. For example, my Canadian bank will buy US dollars at 1,2744 and sell at 1,3451.

Sources: Stack Exchange - This article follows the attribution requirements of Stack Exchange and is licensed under CC BY-SA 3.0.

Images: Karolina Grabowska, Nataliya Vaitkevich, Tara Winstead, Nataliya Vaitkevich



Related Topics