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This 68 message thread spans 3 pages: 68 ( [1] 2 3 > >     
Exchange rate
UK Pound Vs US Dollar

 4:00 pm on Feb 3, 2004 (gmt 0)

The v. strong uk pound against the dollar is not healthy for my payments. Is there a time limit on cashing the google cheques? Ideally I'd like to save them up till the dollar recovers a bit.



 4:06 pm on Feb 3, 2004 (gmt 0)

What makes you think the rate is going to 'recover'? Many analysts are talking about sterling reaching $2 or even higher during this year.


 4:17 pm on Feb 3, 2004 (gmt 0)

Get the rate now as it will get worse before it gets better


 4:18 pm on Feb 3, 2004 (gmt 0)

I believe in the US, you can cash a check up to 6 months after it has been issued. However, don't forget to take into account the time it will take for the check to get from your bank to Google's bank.


 4:25 pm on Feb 3, 2004 (gmt 0)

Last time I checked, the min Adwords bid in US$ was $0.05 and the min bid in CDN$ was $0.08. That works out to a 1.6x exchange rate while the going rate is 1.3.

So it would make sense for Canadian bidders who are looking for cheap bids to go with US$ and save some money. Though I would take a 1.6x exchange rate for cashing my Adsense checks :)


 4:30 pm on Feb 3, 2004 (gmt 0)

What I would do is open a US dollar account at my bank, if yours offers it. Deposit the cheque in there, and then withdraw the money when the rate is better.


 4:48 pm on Feb 3, 2004 (gmt 0)

That's the best way. I have just opened a US dollar account at my local HSBC bank in the UK.


 4:59 pm on Feb 3, 2004 (gmt 0)

Same here - open a USD account - if you can afford to hold the money there do so until exchange rate recovers.

Also you can take some but not all of it out if you need to.


 5:08 pm on Feb 3, 2004 (gmt 0)

That's the best way. I have just opened a US dollar account at my local HSBC bank in the UK.

I too have an HSBC bank account and have thought of opening a dollar account.

As you already have opened one - what's the monthly charge for it & do you get charged for each cheque/ transaction you pay in?

Also - as the dollar seams to be getting weaker and weaker - surely the dollars in your dollar account are depreciating compared to the pound?

These are the reasons why I decided not to open a dollar account. Your affiliate earnings may be a lot more than mine though.


 5:59 pm on Feb 3, 2004 (gmt 0)

US dollars - £1.20 per cheque drawn on the account and £35 annual fee. That's for the Current Account with no minimum balance required and a US Dollar cheque book. Check with your local HSBC to see if these rates have increased since I applied a few months ago.

I plan on using the money while holidaying in America (moving it to a US dollar visa card) so it makes sense for me to do it this way.


 6:12 pm on Feb 3, 2004 (gmt 0)

I hang on to my dollar cheques for 2-3 months then pay in a bunch of them together (thus only paying Lloyds TSB's steep £8 charge once). You do lose interest this way though, and as pointed out above, the dollar could go down further...


 6:28 pm on Feb 3, 2004 (gmt 0)

In modern times the dollar at 1.80 to the pound is very low - I don't see it staying that low for more than a year or so.


 7:27 pm on Feb 3, 2004 (gmt 0)

is anybody aware of any spanish banks that will open us dollars accounts, the only international one i have locally is barclays but they have extortionate(sp?) rates here in spain!


 7:29 pm on Feb 3, 2004 (gmt 0)

My understanding was that Bush is forcing the exchange rate in this way in the run up to the presidential election.

The rate, as it is and as its going, will raise exports and limit foreign travel for American's, thus making America richer all round.

I don't know how sustainable such as strategy is, however.


 8:22 pm on Feb 3, 2004 (gmt 0)

Ideally I'd like to save them up till the dollar recovers a bit

Hedge your position. Take a contract for difference [igmarkets.com]

[edited by: Macro at 8:24 pm (utc) on Feb. 3, 2004]

Michael Anthony

 8:23 pm on Feb 3, 2004 (gmt 0)

Ian_Turner, as someone who has made and lost millions in curency speculation, I personally think that's a very bold statement.

However, if one thing's even more certain, it's the fallibility of "expert economists". There was a survey once where they pitted a team of portfolio managers against a team of monkeys throwing darts at a wall papered with stock listings - to the researchers delight, the monkeys won big time.


 5:22 am on Feb 4, 2004 (gmt 0)

Cash your check before it expires, typically in a number of months.

Now, if you want to speculate on foreign currency exchanges, go ahead. Just don't get the two activities confused.


 10:44 am on Feb 4, 2004 (gmt 0)

I'm seriously thinking about setting up a US$ after reading this great thread.

I guess the main thing here is how likely is it that the US$ will get stronger (or GB£ get weaker for that matter)? This would dictate whether it's worth setting up that US$ account?

I have absolutely no idea on these sorts of things any advice or web site links appreciated.




 11:10 am on Feb 4, 2004 (gmt 0)

I say bollocks to it and just put it in the bank :) Yeah, the exchange rate is pants for us in Eng-ger-land, but it's better than a kick up the arse.


 11:28 am on Feb 4, 2004 (gmt 0)

That's the point the exchange rate isn't in our favour, BUT if we can keep that money in a USD account and transfer it when the the rate is more favourable then we get more money for our money!

For example at the minuete $1000 is around £545 (1 GBP = 1.83798 USD) BUT if the USD became stronger say 1 GBP = 1.4 USD then you get nearly £715 for $1000, £170 extra.

Now imagine your commissions for the year were $20,000, given the above scenario you could generate an extra £3,400, not to be sniffed at! As you can see there are quite big potential benefits for setting up a USD account....

The problem is can anybody accurrately predict when or if those rates will become favourable, if someone could step in here and tell us what's likely to be happening over the coming months/year ;) Of course no-one can fully guess what is going to happen, but surely there are clues/indicators?



 11:59 am on Feb 4, 2004 (gmt 0)

Now, if you want to speculate on foreign currency exchanges, go ahead. Just don't get the two activities confused.

I'm with amoore here. If you're so sure the US dollar is going to rise, why gamble just your AdSense payments on it? Why not buy dollars with the rest of your pounds or zlotys or whatever as well?


 2:10 pm on Feb 4, 2004 (gmt 0)

Yes, MonkeyDex rules!


 3:57 pm on Feb 4, 2004 (gmt 0)

Thanks for the replies, I think I am going to go with the $ account option, I have also found a company that arranges US bank account for UK citizens so thats another option, also handy for withdrawing Paypal payments.


 4:35 pm on Feb 4, 2004 (gmt 0)

Currency Speculation is a form of investment, but it's a zero-sum game, making it more like a gamble (and commissions are the vig).

If you want to bet on the dollar/pound, there are FAR more effective ways to do it than sitting on a check and earning no interest.

Remember, there are two transactions: your revenue from the Adsense Check, and the return of your speculation.

That getting more money if the pound fluctuates is NOT an increase in commissions. It is the return on a successful 20,000 currency buy.

That being said, if you have significant dollar-based revenues AND dollar-based expenses, than a US dollar account makes sense. You now take exchange rates OUT of the equation, which is what you want.

You are in the business of making commissions, NOT gambling on exchange rates.

The entire futures market is made up of traders trying to win the gamble, and businesses that have exchange rate risk but are not in that business.

If sony expects 10 million dollars to head up the food chain in March, they want to know how many yen that is. If they "sell 10 million dollars" for yen, in March (futures contract), then they KNOW their exchange rate. Then they let the traders worry about profiting off rate changes.

If you have significant dollar income/expenses (especially that will net out over the year), open a dollar-based account. Hold your money for doing business in the US in dollars. That PROTECTS you from exchange trading. The last thing you want is to be getting income when $1 gives you .5 pounds, and paying expenses when $1 costs you 2 pounds (extremes of currency exchanges).

However, sitting on non-interest bearing assets in hopes that the exchange rates change is quite frankly, assinine. If you expect the dollar to appreciate, then you can: buy dollars in the future, with the expectation of selling them for more than they are now (highly leveraged, very speculative), buy US treasuries (safe return, in dollars), or buy US equities.

If you want to invest in the dollar appreciating, do it directly, not playing games.


 4:45 pm on Feb 4, 2004 (gmt 0)

I have opened a citibank.co.uk account where I have a Sterling account, a Euro account and a US Dollar account. As long as you keep £2000 across any of the accounts there is no annual fee. You can transfer money from one to the other online whenever you like and pull it out altogether with a Visa debit card if you like. Goes without saying, you can post them your US or UK cheques in an envelope and they will deposit the money at the going rate. There is no commission, but the rate is tailored to take a commission into account.

If you look back upto 1985, the rate has broken the 2:1 barrier only once: http*://uk.finance.yahoo.com/m5?s=GBP&t=USD&a=1&c=3 It follows a sinusoidal pattern. Read that graph any way you want, and place your bets.....

I agree with what alex_h says. But people like me in the UK want to hold on to the cheques until a better day (which almost certainly will come!) when they will be worth more in pounds, and sticking them in a US dollar account and forgetting about it gives a way of doing that. Otherwise you're looking at losing a lot of money for no good reason.


 6:23 pm on Feb 4, 2004 (gmt 0)

I agree completely that currency betting is a different ball game.

I withdraw my ealier suggestion to take out a CFD to hedge against losing money by collecting your Adsense checks :-)


 6:26 pm on Feb 4, 2004 (gmt 0)

Otherwise you're looking at losing a lot of money for no good reason.

Yeeesss... but if you hold onto the cheques rather than banking them and you end up holding onto them for a very long time before the exchange rate improves... you might find that you would have been better off to bank at a worse exchange rate and make up the difference in interest.


 10:20 am on Feb 5, 2004 (gmt 0)

Have any of the other UK users set up a US Bank account?

If so can you give any idea as to which banks, commission and cost rates apply



 4:42 pm on Feb 5, 2004 (gmt 0)

Citibank.co.uk , when I tried, didn't accept business accounts. I tried Natwest but the charge for cashing a Dollar chech drawn on a US bank account was frankly pants.

I think I'll go talk to a US bank at the publishers conference.

In the meantime, we just put US dollar cheques into our UK Sterling Business account and bite the cost.


 6:02 pm on Feb 5, 2004 (gmt 0)

This topic of opening an account in the US has come up several times before. Post 9/11 and recent tightening of financial regulations, trust me, no US bank wants your business unless you have an American social security number.

This 68 message thread spans 3 pages: 68 ( [1] 2 3 > >
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