dollar/pound exchange rate

Get a bit of experience first.

I'm surprised your parents let you on the net by yourself.

Depends on future changes to the rate. Impossible to predict, though the futures market will tell you what the market thinks is most likely to happen, what they are betting on, if you like. Learning to find and understand the future market numbers would be an important step to take before doing any real currency "bets" (coz this is betting you realise)

You could check out UK located branches of American Banks. I think citibank provide an account in US dollars. But hey, I suspect this is only worth your while if you have a quite substantial amount of savings. Like tens of thousands. Otherwise currency conversion charges and bid-offer spreads will eat up any possible profit.

Of course the other way would be to use financial spread betting companies to place bets on the movement of the dollar rate. This would be with good old UK pounds. BUT is VERY HIGH RISK and NOT for the faint hearted. Both gains and losses are amplified by spread betting and again bid-offer spreads work against you. I am not recommending this to you.

Personally, I think the best way to take advantage of the rates is to book a holiday in the US. Take some of your savings there and convert them into memories! Back when the rate was 2 dollars to the pound I had a superb holiday in Florida.

(I am not an expert. Don't listen to me. You mileage might vary etc...)

Si

Problem is that the way the Bush regime is behaving at the moment, the holiday probably won't be that good. I certainly wouldn't want to be on an aeroplane with armed guards walking up and down the isle.

Is that really how futures exchange rates are calculated?

I was told by someone in the industry that they were based on the interest rate differential between the currencies involved.

Presumably you would rather be in one plunging into a tall building at

I'll give that a miss as well.

I suspect there is more chance of being killed on the M25 on the way to the airport.

The futures market prices are based on the differences in interest rates. Nothing else.

Options are based on differences in interest rates, plus volatility between the two currencies.

Any opinions about where the market is going will be reflected in spot prices.

There won't be when the widening of the M25 around Heathrow reduces the speed limit to 40mph in a few weeks time. ;-)

Blimey, when does it get up to 40mph? 3am? :-)

A couple of times I've been driven to Heathrow to catch an early flight on a Sunday morning, and I reckon the traffic then is probably about the level it was designed for ...

citbank do a personal US$ account - which might work out nicely...

In message , Simon writes

If by 'futures' you mean 'forward currency contracts' then their price is determined by the interest rate differential between the two currencies involved, not by market forces.