Assume you are USD-denominated tourist. To travel to new destinations you need foreign currency!! In some countries the dollar is stronger (like Turkey!!) and in other countries the dollar is weaker (like Eurozone and UK - GBPUSD is around 1.5 to 1.6).
Here's a currency ballpark set of rules to work out approximations to how much currency you'll get for your greenback. Once you understand BALLPARK you then need to study time series to understand VOLATILITY (one measure being 52wk range).
TRY is New Turkish Lira. 1.5 of these smackers roughly equate to a humble dollar. So if you have N lira and you change it for M dollars, then N/M is roughly 1.5.
Euro to Dollar is a different beast altogether. Why, because Euro is stronger than Dollar. So if I have N EUR and M dollar then M over N(larger quantity over smaller quantity) should roughly equate to 1.4 (or maybe below).
Quiz: which is stronger, greenback or Ozzie dollar? If I divide my Ozzies by my greenback equivalent I should get ballpark 1.12. The greenback buys around 1.12 ozzies!! Good value!! But it's a close call. It's a similar story for CADS, I can get just over 1 CAD for a greenback. Makes sense, I guess, economies are somewhat similar. Similar story for Swissies, if I divide my Swissies by my equivalent dollars, I get something just over one. So the greenback is marginally stronger than these currencies, but significantly stronger than the lira!!!
Thursday, 11 February 2010
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