What should a European do with this American savings account that is depreciating in value?

April 21, 2008 8:42 AM

European who has USD in an American account - what should I do?

I'm European, but lived in the US for a little while, where I had a very good paying job that allowed me to save money. I have a little over $10,000 in an American CD now. I came home to Europe and went back to school, thinking I could use that money to start up a business, make a downpayment on an apartment or something once I gradutae.

I have been watching in horror as the dollar went down against the euro and now that money I was counting on is shrinking away. Are there any suggestions on what I should do with it? Should I just leave it and wait for the dollar to recover? Should I buy something in the US that is likely to appreciate in value? If I had a good income now, I would buy an American apartment or something with it, but I'm a student living from paycheque to paycheque.

What should I do?

posted by anonymous to work & money (4 comments total)

Leave the money. Do not cash out when the US$ is at a (recent) historical low. Forget about it for months, even years, and one day the value will recover to a stable level that makes it not-a-giant-ass-bite to withdraw.

In the meantime, look out for the highest yield savings vehicle you can put this money into when your CD matures.

Above all, do not panic. It will, at some point, even out. The US is not Argentina and there will not come a time when you are better off using your greenbacks for kindling.
posted by DarlingBri at 9:40 AM on April 21

I'm in a somewhat similar situation, earning dollars but eventually moving back to Europe.
In your shoes, with only 10k in the bank, if I desperately needed it, or pictured myself needing it within the next 18-24 months, I would wire it back, right away. From talking with various investors and accountants, they all see the dollar falling further until the world regains faith in the American economy and the market liquidity starts to rise.

If I could afford to live without it, I would move it into a high-yield savings account and let it quietly grow and ideally, forget about it, leaving it as a buffer for harder times (or better investments!).

Of course, no-one can accurately predict the economy, maybe you'll end up having to sit on that money for a longer term, but if you mentally seperate that money as your 'emergency fund' it might make you happier and feel more secure.
posted by Static Vagabond at 9:41 AM on April 21

Unless you need the money now, you probably should just leave it in a long-term CD.
posted by JJ86 at 9:43 AM on April 21

I may be way off here, but it's been my general observation that although a currency stablizes, it becomes "repriced" - that is unless there is a significant change in monetary policy be either states in question - the currency will tend toward stablization (not going up so fast or down so fast) but will remain at it's new lower or higher price for a very long time. (I'm thinking of the Mexico and Japanese currency here.)

So I would pull it out and move it.
posted by bigmusic at 11:19 AM on April 21