Currency Question

[plaq]

I will be on an expat package (coming from the UK) and I have the option to have some or all of my salary paid in a different currency - GBP, Euro, US$ but not Dirham. I am assuming that since the dirham is pegged to the US$, it would be sensible to be paid in whichever currency is strongest against the $, while having just enough of my salary paid in GBP to cover my expenses back in the UK.

However, I'm not really sure which currency to choose, or whether it really matters all that much. Any advice much appreciated.

[Iron Horse]

Stay with the Pound Sterling. It's your best for conversion right now. The US Dollar in my opinion is still going to take a beating in the near future.

[TheFiveJs]

The fed is supposed to cut rates again which we all know increases inflation some more. I'd get anything except the dollar.

[cairogal]

Can't wait to get that $1200 check and pay some bills down. So much for stimulating the economy.

[Iron Horse]

Originally Posted by cairogal

Can't wait to get that $1200 check and pay some bills down. So much for stimulating the economy.

I'm only getting the $600, but I'll stimulate the economy here in Dubai!

[McBook]

Originally Posted by TheFiveJs

The fed is supposed to cut rates again which we all know increases inflation some more. I'd get anything except the dollar.

I recommend you invest in dot-com shares, housing and maybe the East India company too!

When everyone says do one thing, it's usually the right time to do another.

I say take risk out of the equation and get paid in Dollars. I may be wrong but at least you can't lose money doing it this way (unless they abandon the peg, which doesn't seem likely).

[Iron Horse]

Originally Posted by McBook

I recommend you invest in dot-com shares, housing and maybe the East India company too!

When everyone says do one thing, it's usually the right time to do another.

I say take risk out of the equation and get paid in Dollars. I may be wrong but at least you can't lose money doing it this way (unless they abandon the peg, which doesn't seem likely).

I was worried a bit a few weeks ago, but when the government announced they would keep the Dirham pegged to the US Dollar I did breathe a little sigh of relief. But you can lose money by being paid in US Dollars. Get paid in Pound Sterling and convert it to Dirhams and you'll have more money in your pocket than converting US Dollars to Dirhams.

[plaq]

Originally Posted by Iron Horse

I was worried a bit a few weeks ago, but when the government announced they would keep the Dirham pegged to the US Dollar I did breathe a little sigh of relief. But you can lose money by being paid in US Dollars. Get paid in Pound Sterling and convert it to Dirhams and you'll have more money in your pocket than converting US Dollars to Dirhams.

That sounds like sense, cheers.

[McBook]

Originally Posted by Iron Horse

I was worried a bit a few weeks ago, but when the government announced they would keep the Dirham pegged to the US Dollar I did breathe a little sigh of relief. But you can lose money by being paid in US Dollars. Get paid in Pound Sterling and convert it to Dirhams and you'll have more money in your pocket than converting US Dollars to Dirhams.

Obviously if you get paid £100,000 that's more than $100,000 but i doubt that is what's going to happen here.

My point was that if you decide to get paid in Streling, you are effectively making a bet that the dollar/dirham will continue to depreciate against Sterling. This is risky, although it might pay off.

However, if you get paid in USD, there is absolutely no risk of the real value of your salary decreasing as a result of exchange rate movements.

haha, this reminds me of economics lectures!

[Iron Horse]

Originally Posted by McBook

Obviously if you get paid £100,000 that's more than $100,000 but i doubt that is what's going to happen here.

My point was that if you decide to get paid in Streling, you are effectively making a bet that the dollar/dirham will continue to depreciate against Sterling. This is risky, although it might pay off.

However, if you get paid in USD, there is absolutely no risk of the real value of your salary decreasing as a result of exchange rate movements.

Even if one is getting paid £60,000 it's better than $100,000 right now, and I suspect this is happening here which is how I based my recommendation to stay with the Pound Sterling. The exchange rate is what, $2:1£? (just asking, not making a statement).

I don't see the US Dollar making a strong comeback for another six years (my gut feel), so using the advantage of the Sterling's rate for currency conversion to the Dirham works until the US Dollar is stronger.

The risk and loss for plaq and others here from the UK with being paid in US Dollars is that they will one day return home. They get nailed when they have to convert back to the Pound Sterling in the exchange as the US Dollar isn't as strong. This is the reason why many Brits, and Europeans on the Euro, are finding holidays in the USA easy right now as their money goes far, and why many Americans find it painful to visit the UK and Europe.

If I, as a yank, could be paid in Pounds or Euros I'd be all over it.