Diversifying Into Other Currencies
The following is a transcript of "
Hello and welcome to Money Girl's Quick and Dirty Tips for a Richer Life.
Today's topic: Diversifying into other currencies.
A listener named Dave emailed me with this question:
How is the U.S. dollar valued on the international market? Why does the value fluctuate? And more importantly, why is the U.S. dollar now in a free fall? I'm a U.S. citizen living in New Zealand. I often transfer funds from the States to New Zealand. With the value of the dollar falling (which is correlated to the New Zealand dollar's rise), I experience a monetary disadvantage with each transfer.Thanks for the questions, Dave.
The Declining DollarThe U.S. dollar is falling and it's especially noticeable to U.S. citizens traveling or living outside of the United States. Measured against a trade-weighted basket of other currencies, the dollar has lost a quarter of its value since 2002 and 6% since August. When the dollar falls relative to other currencies, the prices of imports in the U.S. go up, and the prices of U.S. exports go down, creating more demand for U.S. goods that are sold overseas. A weak U.S. dollar means that your money doesn't buy you as much when you're traveling or living abroad and converting U.S. dollars to other currencies.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV