Monday 27 February 2017

How the dollar has jinxed that New York shopping trip

Independent.ie Newsdesk

Independent.ie Newsdesk

There may be no need for you to put your money into a non-euro savings account
There may be no need for you to put your money into a non-euro savings account

Non-euro bank accounts - where you put your savings into the likes of a sterling or dollar deposit account - are an option for people who wish to reduce their exposure to a falling euro.

Most mainstream Irish banks offer non-euro deposit accounts, as do many specialist banks, such as Investec. However, the interest paid on these is very low - and you could lose money on the exchange rate the bank uses to convert your euro when you open such an account. You could be caught out too if the currency which you decided to convert your savings into takes a dramatic turn for the worse.

Furthermore, there may be no need for you to put your money into a non-euro savings account - Irish people who live in the eurozone don't usually have any exposure to the falling euro as they're paying for their goods and bills in euro and are typically getting paid in euro too.

Holidaying in such countries has also become more expensive - because you'll get less of the local currency for your euro than would have been the case when the euro was stronger.

For example, in early March 2008, you would have got US$1.5 for one euro. Today, your euro will only get you about US$1.1 - about a third less.

At that rate, shopping trips to New York would be best left until the euro gets stronger, especially if buying designer labels.

The weak euro also makes it more expensive to buy certain goods in Ireland, particularly ones imported from the US and China.

"The weak euro has made it more expensive for retailers to buy certain goods in from China and that eventually feeds its way into the price the consumer pays," said Bryan McSharry, managing director of MoneyCorp.

"So consumers could see things like hardware, BBQs, garden furniture and electronic goods like iPads become more expensive, as all of these things will be priced up to reflect currency movements."

Sunday Indo Business

Read More

Promoted articles

Editors Choice

Also in Business