Planning around the exchange rate

[Gaffer42ca]

My husband and I are hoping to head to Disneyworld at some point in the next year or so, and were wondering if any of the Canadian members had tips on how to save on that almighty exchange rate.

For the US members to understand what I mean, imagine your dollar is worth about .65 cents. That means you add at least a third, roughly, to the cost of everything you buy when at WDW - not one of the cheaper places in the world to holiday to start.

So - any ideas for the poor saps north of the border?

 

[2much2do]

Okay, I am an American who frankly does not understand this. Maybe, someone out there can help this poor sap, because I am confused beyond belief!

I live in upstate NY, about 3o min. from the Canadian border (Gan. I'm about an hour from Kingston), so there are plenty Canadians in and out of our stores here, and all stores and restaurants do the exchange thingy. Every Canadian I know seems obssesed with this exchange rate and the "your dollar is worth so much more" mentality, but I just don't get it. Let me explain:

Yes, while here in the US our dollar is worth well....a dollar, and your dollar is worth about $.65. I get that. So, when you guys come here to shop, let's say you want something that is $10. Ten of our dollars that is, so for you it will cost about $14 or $15 of YOUR dollars. Let's say this item is.........a video. Let's say it's a Disney Sing along songs video. How much would this same video be if you bought it in Canada?????? Wouldn't it be about the same $14 Canadian??????
Every time I go over to Canada (okay, not too often) I have to pay what feels like more for stuff, cuz the prices are in Canadian dollars. I may get more Canadian currrency for my American dollar, but then I have to pay more Canadian dollars for things. Like if I went over to Canada and exchanged my $10 American for $14 of your Canadian. Say I went and bought that Disney video. I'd have to hand over my whole $14 Canadian. So even though it looks like I am paying more, I am just paying the same. Isn't it that way for you too?

As I said, I am very confused. I just don't understand the whole hullabaloo!

 

[Wilt Dasney]

I'm currently taking a class in macroeconomics, and one of the things we talk about regarding international trade is the "strength" of one country's currency against another. That may be what's coming into play here. I'll try to explain what I'm talking about, and somebody who knows more about the subject can tell me if I'm right and wrong.

The exchange rate isn't necessarily a fixed thing, but fluctuates based upon economic trends within the two countries in question. A Canadian dollar may intrinsically be worth less than an American dollar, but this disparity can rise due to inflation in the United States (or, theoretically, deflation in Canada, but that's a rare trend, from what I understand). If the US economy experiences consistent inflation (that is, a noiceable rise in the overall price level), then the value of the Canadian dollar is degraded even more, all things being equal. Say the US economy experiences overall inflation of 3% over a year's time, while the Canadian economy remains stable. Eventually, American wages will rise to meet the changing prices, so the change will not affect Americans; Canadians, however, are still making the same amount of money, so trips south of the border are made even more expensive. If Canada experiences inflation at a slower rate than the US, then the same effect occurs. They may indeed have to may more in Canadian dollars to buy products in Canada due to the exchange rate, but inflation can exacerbate the problem and make the price of buying American products PROPORTIONALLY higher. (That is to say, the amount payed American is not "equal" to the same amount that would be payed in Canada, after taking into consideration the normal difference in value between the two.) Domestic inflation is one of those things that erodes the power of currency domestically while strengthening it on an international level, and from what I understand, the American economy DOES indeed experience inflation at a rate of about 2-3% a year. This may be the root of the problem.

....Or maybe I just don't know what I'm talking about.

 

[CmdrTostada]

i think this is what happens. Say you make $6 an hour american for flipping burgers at McDonalds. Say your friend "Joe", who lives in Canada, works the same job as you he would make $6 an hour Canadian, thus making it harder for him to buy stuff in America.

Im probably totally wrong.

 

[MKCustodial]

Originally posted by Gaffer42ca
My husband and I are hoping to head to Disneyworld at some point in the next year or so, and were wondering if any of the Canadian members had tips on how to save on that almighty exchange rate.

For the US members to understand what I mean, imagine your dollar is worth about .65 cents. That means you add at least a third, roughly, to the cost of everything you buy when at WDW - not one of the cheaper places in the world to holiday to start.

So - any ideas for the poor saps north of the border?

You think YOU guys have problems? Try a 1 to 3 rate. That's why it's so freaking hard for us Brazilians...

 

[tenchu]

Originally posted by Wilt Dasney
I'm currently taking a class in macroeconomics, and one of the things we talk about regarding international trade is the "strength" of one country's currency against another. That may be what's coming into play here. I'll try to explain what I'm talking about, and somebody who knows more about the subject can tell me if I'm right and wrong.

The exchange rate isn't necessarily a fixed thing, but fluctuates based upon economic trends within the two countries in question. A Canadian dollar may intrinsically be worth less than an American dollar, but this disparity can rise due to inflation in the United States (or, theoretically, deflation in Canada, but that's a rare trend, from what I understand). If the US economy experiences consistent inflation (that is, a noiceable rise in the overall price level), then the value of the Canadian dollar is degraded even more, all things being equal. Say the US economy experiences overall inflation of 3% over a year's time, while the Canadian economy remains stable. Eventually, American wages will rise to meet the changing prices, so the change will not affect Americans; Canadians, however, are still making the same amount of money, so trips south of the border are made even more expensive. If Canada experiences inflation at a slower rate than the US, then the same effect occurs. They may indeed have to may more in Canadian dollars to buy products in Canada due to the exchange rate, but inflation can exacerbate the problem and make the price of buying American products PROPORTIONALLY higher. (That is to say, the amount payed American is not "equal" to the same amount that would be payed in Canada, after taking into consideration the normal difference in value between the two.) Domestic inflation is one of those things that erodes the power of currency domestically while strengthening it on an international level, and from what I understand, the American economy DOES indeed experience inflation at a rate of about 2-3% a year. This may be the root of the problem.

....Or maybe I just don't know what I'm talking about.

I think you might have explained the most of it. :animwink:

 

[2much2do]

So, are you saying that even though the prices are different between the US and Canada due to the currency being different, but also the value of the merchandise is different due to inflation?????? So that my one American dollar can buy more both here AND in Canada (even when exchanged for about $1.35 Canadian) because our rate of inflation is better than theirs????????

 

[Wilt Dasney]

Originally posted by 2much2do
So, are you saying that even though the prices are different between the US and Canada due to the currency being different, but also the value of the merchandise is different due to inflation?????? So that my one American dollar can buy more both here AND in Canada (even when exchanged for about $1.35 Canadian) because our rate of inflation is better than theirs????????

Yeah, that's basically it; $10 American would be about $13.50 Canadian, and in a stable economy, both amounts would buy about the same.

In an inflationary environment, $13.50 Canadian won't buy $10 American because American prices are going up faster than those in Canada. So Canadians aren't just "losing" on the exchange rate (which isn't really losing, since the amounts are equivalent), but are REALLY losing money to American inflation.

However, your comment about our dollar buying more here AND in Canada isn't really true; domestic inflation will make your money stronger in Canada but actually weakens it here at home. (That's why wages have to rise to maintain the standard of living in an inflationary environment. As prices go up, people have to make more just to afford all the things they were consuming before inflation.)

Anyway, enough of this; I hope I've helped a bit, but it's not why the poor person posted the thread in the first place. Does anybody actually have nay advice for him/her?

 

[SteveUK]

I think I understand the point about inflation but when you are talking about the cost of a trip to WDW, isn't the fluctuation in exchange rates virtually negligible? The highest figure I have seen quoted on this thread for inflation in the US is 3%, a pain in the **** but not enough to make any real difference to your plans surely?
I am from the UK and the US exchange rate here is very good for me. I checked today and I can get more dollars for my pound (about 1.5) than I have been able to for nearly two years now. Isn't this favourable trend reflected everywhere outside the US?

 

[2much2do]

Thanks for you help Wilt! I can't say I am completely clear on it all now, but I do feel a little better about my understanding.

Sorry I deviated from the original post, but part of my confusion was about whether or not Gaffner actually needs any advice at all, or if he/she is just overreacting to the whole "poor Canadian exchange rate" syndrome I find so prevailant in Canada these days After your explanation of why it feels like a problem for them, I realize that the advice Gaffner really needs is just a general "how to save money at WDW" thing, and really has very little to do with the exchange rate, or being Canadian or anything. I have to agree with SteveUK and say that our inflation is not so bad that the power of the Canadian dollar is really that weak. They have inflation too, you know! As I said before, I travel to Canada often and really I cannot detect that much of a difference in the amount or value of things I can buy with my so-called powerful American buck. The exchange rate just makes it feel like it because my one dollar brings me a dollar and change Canadian (so I FEEL like I made out good) but stuff basically costs the same here as it does there. The fact of the matter is WDW is expensive for Americans as well. I'm used to buying a bottle of water at the gas station here for 75 cents, so getting charged $2.50 for one at Disney sucks for me too!!!!

 

[maureen ashton]

Gaffer42ca, also a fellow Canadian, there have been some good deals in the most recent past, with Disney hotel rooms at Canadian par. My Sister and I took advantage this past April and purchased the 7 Day Hopper ticket through CAA buy one get second one 1/2 price, but had to work our vacation around the tickets time frame, they expired May 13, 2002. If when you go is not a problem the best thing is to watch for these deals, which I'm sure there will be more of, and plan your vacation then. Florida has to be hurting without the influx of Snow Birds visiting their state due to our sucky dollar, although our dollar has been getting better with all the financial/wall street junk that is going on in the U.S. Stay at the All Star Resorts on Disney property, they are the cheapest, or choose to stay off property if you don't mind all the driving, there are great deals on hotels in Kissimmee. If you are flying and staying on Disney property may be the cheaper way to go, but only if you don't plan on going off Disney property, you don't need to rent a car, use the Disney transportation for everything, it's great, you just have to get from the airport to Disney and back. If you are driving to Florida you have to weigh the time versus money thing. Do you want the extra time saved by staying on Disney property by not having to drive in and out everytime you want to do something Disney, or do you want a cheaper accomodation with a minimum 45 minute drive in and out to anything Disney, thus using more time and money spent on gas etc. If you drive to Florida try to eat breakfast in your room by bringing along a cooler and bringing cereal, cereal bars etc. from Canada. Also if you are driving bring along your own soda pop from home it is cheaper in Canada than the U.S. and bottles of water. If you end up staying on Disney property be sure to purchase the all you can drink mugs for your stay, which can be filled with soda pop, coffee, tea, hot chocolate and lemonade from the foods courts, this saves a lot of money. Do a lot of planning, have a budget and stick to the budget, you can get carried away in the excitement and Disney atmosphere purchasing things that are discarded once you arrive back home.

 

[2much2do]

Originally posted by maureen ashton
Stay at the All Star Resorts on Disney property, they are the cheapest, or choose to stay off property if you don't mind all the driving, there are great deals on hotels in Kissimmee. If you are flying and staying on Disney property may be the cheaper way to go, but only if you don't plan on going off Disney property, you don't need to rent a car, use the Disney transportation for everything, it's great, you just have to get from the airport to Disney and back. If you are driving to Florida you have to weigh the time versus money thing. Do you want the extra time saved by staying on Disney property by not having to drive in and out everytime you want to do something Disney, or do you want a cheaper accomodation with a minimum 45 minute drive in and out to anything Disney, thus using more time and money spent on gas etc. If you drive to Florida try to eat breakfast in your room by bringing along a cooler and bringing cereal, cereal bars etc. from Canada. Also if you are driving bring along your own soda pop from home it is cheaper in Canada than the U.S. and bottles of water. If you end up staying on Disney property be sure to purchase the all you can drink mugs for your stay, which can be filled with soda pop, coffee, tea, hot chocolate and lemonade from the foods courts, this saves a lot of money. Do a lot of planning, have a budget and stick to the budget, you can get carried away in the excitement and Disney atmosphere purchasing things that are discarded once you arrive back home.

As I said, this is just general save money at Disney advice. In fact, if you replaced the word "home" in your post for every time you wrote "Canada" this advice could apply to anyone trying to save money. So.......how about running a search on money saving tips? We have had TONS of posts on that before!!!!!

 

[Sherm00]

Ok here is a simple way to figure it out. go to your local bank, or a bank here in the US or I think even AAA dose it. give them however amount of money you want and trade it in for american money or travelers checks. Let the bank figure it out.

 

[WDWManic]

Thank god I live in Massachusetts!

 

[Gaffer42ca]

Thanks, Maureen, I think I'll look at those and also at the general threads on how to save at Disney. This will be very useful.

It's interesting to see how the whole economics thing has panned out!

For 2much2do, I guess the problem we run into is this -
An average income is 35,000.00 a year. Great income, right?
But, housing in the area I live starts at over a hundred thousand for a two bedroom bungalow. Average rent is about eight hundred. A loaf of bread is $1.56, a used Ford Taurus is about $20,000.00 (1999, we happened to be looking at it this weekend).
We go to the US, it costs us (wait - let me get it off the internet -) $1556.00 to buy $1000.00 US. Your dollar goes farther, I suppose is my bottom line - I have many US based friends who holiday in Canada precisely because of the beneficial exchange rate. (And a friend to stay with doesn't hurt...)

Truly, though, I have great sympathy for those who reside in Brazil - I'm feeling much better about the Canadian dollar!

Have to say, too, I am impressed by the explanations offered on this board! Obviously there are some folks of wit and wisdom here.

 

[2much2do]

Originally posted by Gaffer42ca

We go to the US, it costs us (wait - let me get it off the internet -) $1556.00 to buy $1000.00 US. Your dollar goes farther, I suppose is my bottom line

Okay, I don't mean to make this thread drag on longer than necessary, but again, here is the part I don't understand. You just said it takes $1,556. of YOUR Canadian dollars to buy $1000 American dollars worth of stuff. Right? That's what you said? But then I went to my currency exchange website and entered $1,000 American, and converted it to Canadian, and came up with $1,538.6 CAD. So................$1,000US=$1,540 (or so) CAN. So WHAT IS THE BIG DEAL????????

Stop reading the price signs on our merchandise. Then you won't feel cheated. If we're gonna go buy numerical value alone, then your stuff costs me more, since I can get a loaf of bread for $1. I buy a Happy meal here at McDonald's for $1.99. But the exact same Happy Meal costs me $2.45 Can. Your prices are more (in numerical values) to outweigh the currency exchange. BUT IT REALLY COSTS THE SAME!!!

 

[maureen ashton]

Well the big deal is that over $500 Canadian of our hard earned money was just lost to money cyberspace to purchase $1,000 U.S. this lost money has to be calculated into the vacation budget and leaves us less money to spend at WDW and alsoa happy meal here in Canada is $2.99 plus taxes, which has also not been figured into the equation - taxes. In Ontario we pay 7% gst (goods and services tax) and 8% pst (provincial tax) on our purchases with a few exceptions. Most U.S. states I have visited have a state tax only. When travellers to Canada leave they can put in a claim to receive back all the gst they paid while visiting. We do not have the same priviledge when returning to Canada from the U.S. and if asked, by customs, we have to pay GST and duty on our purchases upon our return from our U.S. vacation.

 

[Wilt Dasney]

bottom line

"Well, I don't care too much for money...
Money can't buy me love"

Peace. :animwink:

 

[Gaffer42ca]

Know what - I asked a question, I got an answer. I don't expect a US citizen to understand, which is why I asked if any Canadians on the board had any ideas - they did. I'm happy. Go on if you like, I'm for letting this drop.

 

[Wilt Dasney]

Originally posted by Gaffer42ca
Know what - I asked a question, I got an answer. I don't expect a US citizen to understand, which is why I asked if any Canadians on the board had any ideas - they did. I'm happy. Go on if you like, I'm for letting this drop.

Was this directed at me? If so, I'm sorry for any offense you may have taken at my last post. I did spend quite a bit of time trying to explain why this might be an issue for Canadians on this thread, so I think I made it clear that I'm not taking the subject lightly.

I was just attempting to bring some levity to this thread. It seemed we were starting to go around in circles with all this discussion of inflation and exchange rates.

Hope your trip goes well, and if no one else has any advice to offer, then I agree that this thread has served its purpose.

Peace.