My knowledge of investments is getting better but I am still a bit of a newbie. When people suggest buying US dollars due to the current exchange rate - whats the best way to actually go about this?

Also - the exhange rate seems very good at the mo. any factors that may help suggest whether it will go beyond £1:$2 or fall back down to 'normal levels'

Cheers

J

An offshore account is one way using UK banks based in Isle of Man or Channel Islands, eg.:

http://www.alliance-leicester.co.im/us_dol...ngs_account.asp


If you regularly go to the US then it might be worth opening an account with Citibank (UK) instead:

http://www.citibank.co.uk/personal/banking...ollar/index.htm


Just google 'offshore' and the banks name to find others.

Whilst the BoE are hiking rates to control inflation then sterling should remain relatively strong for some time IMO - the next rate rise could be enough to hit the magic $2/£. Whatever you read on here about the economy, the fact is that GDP is forecast to be nearly 3% with low unemployment so this year should at least still be OK but 2008 could be altogether different.

If I bought at $2 and waited to sell at maybe $1.6 then that would be a gain of 25% (ie. $2 would now be worth £1.25) and there's interest on the account as well. The question is, how long does it take to hit $1.6 or lower?. Presumably there's no tax to pay for gains through currency fluctuations either, so the 25% gain might be tax free although it is worth checking this out HM Revenue & Customs.