Dollar versus Euro

[Zwiggelte]

Most european poker players are losing every day more money.
For every 1.25 $ we get one euro, a couple of months ago it was for every 80 $ cents we got one euro. And if we can believe some analists we are going to the 1.55$ exchange rate.
I suppose we european players have to play higher limits to solve this problem, or does somebody else have another solution..

[rusty JEDI]

Canadians feel for you.

Last January $1 USD got us $1.61 Canadian
now..........$1 USD gets us $1.28 Canadian

We really need the American economy to pick up so they arent losing to all the world currencies. It is like another giant rake. Our only saving grace is that we dont pay taxes and they do.

[Frozen]

[ QUOTE ]
Most european poker players are losing every day more money.
For every 1.25 $ we get one euro, a couple of months ago it was for every 80 $ cents we got one euro. And if we can believe some analists we are going to the 1.55$ exchange rate.
I suppose we european players have to play higher limits to solve this problem, or does somebody else have another solution..

[/ QUOTE ]

Just a correction...the Euro was at $0.83 two and a half years ago- not "a couple months" ago. See chart below, and click 'monthly':

http://legacy.futuresource.com/partners/cme/chart.asp?period=D&symbol=EC1!

You do know, you have the option of an airtight hedge by putting on a leveraged forex or forex futures trade to offset all your US Dollar assets. Structured correctly, you'd have 100% currency exchange fluctuation risk.

I'm series 7 licensed, so if zoo members want me to take the time to explain this concept in further detail, let me know...

[lefty rosen]

Yeah its the same, for Canadians. I suppose if you were a negative EV player it would be great. But for positive EV players it's bad news. I just wish the sites that had Euro games and Pound games were larger, I would be there in a heartbeat.......

[Gotmilk]

the pound games are a bad deal they usually rake 3 lbs max instead of 3 dollars max. thats why i used to like playing in euros on intercasino back when dollars were worth more
:-)

[Hung]

I've mentioned this several times.
This dollar is killing me. I lose $2000 if I withdraw 10k.
I just came back from my bank this morning. I have openened a dollar account. Now I can withdraw my money and keep it as dollars. I'll wait untill it goes up again. I wont be able to use the money. But I'd rather wait now... This is bad...

[Frozen]

Leveraged forex hedging would completely immunize you from any and all exchange rate fluctuations!

[Cyrus]

"European poker players are losing every day more money."

What are you talking about? European players' euros are worth more dollars every day. It's the American poker players who are losing money when they're playing in Europe. When they exchange their bucks for playing chips in euros, they get shorted.

This euro-strengthening trend should last well into 2004.

[Frozen]

Cyrus, trust me...you're wrong. Assuming the European player intends to spend his money in Europe, and not in the states- the weak Dollar is costing him serious dough on any funds he has deposited at poker sites. His Euros are able to purchase more goods and services in America- but the typical European will spend his money in Europe- not the U.S.

[Lori]

To get 1000 pounds used to cost me a $1600 cashout, now it is closer to $1800, seems to me like I'm $200 worse off for the same position.

Lori

[pudley4]

Yes, their Euros are worth more dollars every day; however, most of the funds in their poker accounts are in dollars. As the dollar grows weaker, they are able to buy fewer euros when they cash out; therefore they are losing money.

[Cyrus]

If this is a discussion about online players, then I'm sorry, I didn't realize that. I was talking about pure-bred Europeans /images/graemlins/smirk.gif playing poker in bricks-and-mortars European cardrooms. Yes, online websites use dollars as their currency, so any player who forks over Euros to buy in, indeed loses money whenever he cashes in and reconverts to bucks. True enough, as long as the dollar is going down against the Euro.

(And American-based online players who never get to see a Euro in their life, also lose -- due to the dollar's buying power being eroded, in general. But you already knew this.)

--Cyrus

[Zwiggelte]

1.26$

[daryn]

how does all of this work? anyone knowledgable want to fill me in? i mean how do exchange rates and junk work.. i do not understand economics at all.

[Lazymeatball]

A euro represents purchasing power in Europe, as the demand for exchanging dollars into euros goes up, a dollar will get you fewer euros. Supposedly the Feds are allowing the dollar to weaken as a method of strenghtening US exports in the coming year as some sort plan for economic growth. As a result I plan on investing my life savings in ruby encrusted jewels.

ps. my economic knowledge is based on Dilbert comic strips.

[jstnrgrs]

I take it that there are no decent euro poker sites. If there were, I would play there even though I am in America.

[dink]

At the risk of sounding like a whinger

us aussies are doing it even harder, last year, actually two years ago I was getting $2 Aus for every US$, now when I deposit US$ into my Aus $ bank accounts I only get 1.3 Aus $ for every us$ I feel like I am losing $700 on every $1000 US I withdraw from my netteller a/c

The aus $ has risen from less than 50c US to almost 80c US

but I am happy that this problem only effects me when I win money, it also makes buying poker books from the US cheaper.

Dink

[Mike Haven]

"For every 1.25 $ we get one euro, a couple of months ago it was for every 80 $ cents we got one euro"

this is a strange one

if you were a losing player you would be pleased because your E100 that you were prepared to lose each month used to buy you only $80 of chips, whereas now it buys you $125 of chips - if you continued to play your $1-$2 game you would have one and a half times more play time (this could explain why the same low limit european fish at the likes of intercasino keep playing longer than seems likely)

if you are a winning player, you can continue to play in your favourite $10-$20 game for only E8-E16 whereas it used to cost you E12-E24, or, you can choose to play in a $15-$30 game for the same E12-E24

if the exchange rate had gone the other way, and you had to pay E16-E32 instead of E12-E24 to play $10-$20 i would imagine that poker players would make the same complaints, only different!

i guess the only real answer is to play in the size of dollar game that provides your desired win rate in euro terms, and to try not to keep the usually unused portion of your capital bankroll in dollars

[spamuell]

[ QUOTE ]
if you are a winning player, you can continue to play in your favourite $10-$20 game for only E8-E16 whereas it used to cost you E12-E24, or, you can choose to play in a $15-$30 game for the same E12-E24

[/ QUOTE ]

Mike - the problem is that for a European or British player to have the same win rate in their currency that they used to have, they have to move up to higher, therefore (usually) tougher limits, which are harder to beat.

As an extreme example, if for every £1 of mine I could get $100, I would have to play $100/$200 for the same win rate that I'm getting at 1/2 (although I suppose actually I'd end up losing less money at $100/$200 this way than I usually would /images/graemlins/wink.gif)

Conversely, if every $1 was worth £100, I should easily be able to make £800 and hour playing 2/4 hold'em.

Hence our whining.

[Zwiggelte]

$1.2748 and counting

[bigpooch]

I would hate to suggest speculating in the forex currencies
markets, but maybe you should position yourself expecting
that the dollar will weaken against almost all currencies
during 2004. Two years ago, I suggested to a friend of mine
to consider taking his US dollars and investing in ADRs or
European equity markets; still don't know if he followed my
advice.

There is one online cardroom that I know of where you can
play for pounds, euros or greenbacks: InterCasino a.k.a.
Cryptologic. The 20-40 games are quite wild and I think
they offer some bonuses as well. Unfortunately, their
software is less than adequate!

[FatLoser]

But, I know when it will turn. Same day I visit the states next time the dollar will probably increase its value by 50% or something.

[archmagi]

Try this to see how bad it can get:
I live in Europe, play online poker, AND I get my wages in dollars! I'm losing at every front.
/images/graemlins/mad.gif
I don't play the euro tables because the sites that offer them are not the juiciest. I can't convert my wages, I'm an expat and I move around quite a bit. I still like my job so changing is not an option.
I suppose I either have to accept becoming poorer everyday, or find some creative way to diversify my various sources of income /images/graemlins/cool.gif

[RollaJ]

To all out there sorry our currency sucks, but hey at least we provide you such wonderful products as Coca-Cola, McDonalds and all that other crap, and think of how cheap you can buy a Cadilac Escalade now!

With all due respect, there is a very simple solution...

A)If you are a low limit player cash out every week when you have over 100BB in your account, there is basically no cost to you to withdraw and when you convert to your home currency you will of course lock the value (buying power)
B)If you are a very high limit player hedge with a Euro or Aussie futures contract, or an option..... hell you can even go short Gold vs. the dollar as that is a smaller contract size.
C)Take advantage of the whole situation and come visit America (we may have to fingerprint you though) and spend your winnings via a neteller debit card
D)Just leave the money in your Party account, earn interest and wait for the Dollar to rise back up...

[Frozen]

[ QUOTE ]


B)If you are a very high limit player hedge with a Euro or Aussie futures contract, or an option..... hell you can even go short Gold vs. the dollar as that is a smaller contract size.


[/ QUOTE ]

Actually, that's a bit backwards...the hedge would be to go LONG gold futures, not short....but you're definately thinking in the right direction.

Anybody who's tremendously bothered by currency fluctuations can just set up an airtight hedge in the currency futures or forex markets, instead of sitting around whining about it. BTW, gold bullion futures are more of an approximate hedge, but I do see what you mean about smaller contract sizes.

[ramjam]

</font><blockquote><font class="small">En réponse à:</font><hr />
Anybody who's tremendously bothered by currency fluctuations can just set up an airtight hedge in the currency futures or forex markets, instead of sitting around whining about it.

[/ QUOTE ]

I think this is missing the point a little. I doubt that depreciation of the capital value of one's dollar bankroll is a big issue - because, unless one is thinking of retiring, one is not planning to spend it in the foreseeable future.

What seems to bug people more is that the actual/expected earnings that they may rely on for income each month are lower than what they used to me. This fall in earning power has already occurred. Hedging forward expected future earnings seems too complex and expensive for most people, introduces additional risk in that one doesn't know what those earnings will be and, if done now, will only serve to lock in the current rate that people are whining about.

BTW, I've crystallised about £8,000 in exchange losses over the last year. But I'm not whining /images/graemlins/smile.gif

[RollaJ]

You are correct abount going long gold to hedge an essentially long position on the dollar, I had a brain fart. Truth is you need a lot of money in your account to justify something like this. Most people should just withdraw often and keep a minimum bankroll online

[Frozen]

Ramjam, you're point is totally valid. While one can easily hedge againt depreciation of dollars on deposit at poker sites...it is very difficult to get around the problem of one's dollar income staying the same- while those dollars buy fewer goods &amp; services in Europe. Playing at higher limits isn't necessarily a solution, as the games get tougher as you move up in limits...so yeah, I do see your point.

[Lori]

there is basically no cost to you to withdraw

Alas, to cash a USD check in the UK costs around $20 before the bank will even look at it.

Lori

[RollaJ]

even an etf from neteller? What about using the debit card?

[archmagi]

I don't think you can do an eft from Neteller to a bank in Europe.
The debit card is a good option though, and with withdrawal limit of $1,000 per day, it should be enough for everybody.
I'm not really bothered about my money on the net because I don't rely on it for a living, and as long as I win at a faster rate than the dollar is losing value I won't complain. I'll keep on withdarwing the excess from my bankroll, and anything is better than nothing.
I don't think we will see 1.55 exchange rate for some time to come despite what some analysts say. I'll go with the more conservative estimates of 1.3-1.35.

[archmagi]

I totally agree ramjam. We're not talking about millions here, and hedging with futures etc have a cost attached to them, monetary and timewise.
Anyone doing international business is exposed to exchange risk, and while it can be hedged against, I don't think that's worth it for the online bankrolls (at least for my humble bankroll).

[Zwiggelte]

I heard this morning that some analists are thinking that the dollar exchange rate will go to the 2$.
If that will be the case i will drive an American car and go to Vegas every month to sleep in The Bellagio...