Originally Posted by
NickB
How easily/well do Euros (rather than USD) trade in the cuevas? Will I take a significant hit in exchange rate terms in selling euros rather than US dollars and would I be better off changing my euros to US dollars and take these to Argentina instead?
My exchanging euros to dollars first here will typically entail an additional 2.5-3% hit in terms of exchange rate loss so if the "premium" to be paid in spreads for EUR/ARS rather than USD/ARS is not more than 1 or 2%, I would probably be better off taking euros. If the premium to be paid is more (or if it is significantly more hassle to find a cueva accepting euros), then the double conversion EUR>USD>ARS would still be worth it.
If you are taking a 3% hit for trading Euros to Dollars in Euroland then you should perhaps be looking at who you are banking with. Retail exchange rates are one thing, but that kind of spread seems excessive... its like you are almost getting raped. Who do you bank with...? Have you compared this with a local money changer...? Do you have a brokerage or securities account...? Many times ForEx spreads are smaller if you trade from a Investment account rather than from regular commercial banking accounts. I suggest you check with your account manager at your FI and see what options you have.
In Buenos Aires, the Euro to Peso is traded through the US Dollar, you get a double hit on the bid/ask spread. Also, since the Euro to US ForEx market in EZE is very small, the spreads are abnormally high. Its hard to calculate with a proper degree of certainty what spreads you will face since this will depend on where you trade (here in EZE).... its not the same if you transact at a market-maker in La City or if you are dealing with a sub dealer, etc.
Hope the above helps.... and hope you have a great trip!!
^