Currency Exchange Rates–Like Gas Prices.

Lately I’ve been seeing numbers quoted in the media that are totally inaccurate for the current exchange rates between pounds and U.S. dollars. At one point not too long ago, 1 pound = over 2 U.S. dollars. But since I’ve been here, it’s been 1.86 or lower (although admittedly most often I just double any price I see to roughly estimate the cost in U.S. dollars). But for some reason it drives me crazy when someone quotes a rate that is clearly more than double. I’m like “do these people stay on top of the news?! do they not realize the rate is LESS than double?? where are they getting these numbers??” And then I realize that the only reason I know the exchange rate so well is because I’m actually living here, on American dollars, and even though each time I go to the ATM I take out the same number of pounds, each time a different amount of U.S. dollars is deducted from my bank account. Obviously, when the rate is getting low (in the 1.70s) I want to take out as much money as possible, so I check the rates several times per day. Newspaper journalists from the U.S. are probably not thinking “Hmmm… let me go recheck the exchange rates real quick so I can make sure this figure is completely accurate.” Although, if they’re going to take the time to do the math anyway, why not get it right?

Anyway… It’s kind of like getting gas back in the states over the past year or so. Every day it’s kind of a gamble… “should I get gas today before it could go up even more, or should I wait for it to go down tomorrow?” I don’t know about the rest of the country, but around L.A. gas would often jump up or down quite a bit in just one day, and it makes a big difference. (By the way, when I hear gas is going up in the U.S. I often think “shoot! I need to go fill up my car!” and then I remember I don’t have one….).

Here, when the exchange rate was briefly down to 1.74, 250 pounds = 435 U.S. dollars. Then it jumped up to 1.86 pretty fast, where 250 pounds = 465 U.S. dollars. Taking money out of the bank a day later was a loss of 30 U.S. dollars! Crazy! And thinking about how much I pay for rent (650 pounds) that’s the difference between paying $1130 per month, or $1210 per month.

Currently the euro is down to 1.38 USD per euro. I’m going to be going on several trips in the coming weeks where I will need euros. I wish I had a way to take out euros!! For those who don’t know.. the way to get the best exchange rate is to take money out of an ATM. They have a bank in London that is partnered with my home bank so I don’t get charged any fees, and get the best exchange rate. If you go to a money changing place you totally get ripped off (Alexander and I learned that the hard way the first time we went to Paris), and if you use a debit card or credit card you get charged an international transaction fee of 3-5%. We are becoming masters of getting the most for our weak dollars over here 🙂

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