The exchange rate is ridiculously low... 1.136-ish. If you put your payment on hold, next month it might be a little higher around 1.15+ if the price of oil settles down. I'm thinking about putting my payment on hold, but not sure I want to wait another month
Well I put my payment on hold today since the Bank of Canada increased rates and the US/CDN rate is even lower now around 1.132. I don't know if it will even be in time, but it should be as my payment page still hasn't gone to PIP and I'm using EFT. So if by next month the rate is even 1 cent higher, it's like a 1%/month return for me heh
The U.S, economy is currently in a down trend. It has long been recognized that the only cure for the U.S, trade deficit is a weaker U.S. dollar to make exports more competitive and imports less so. That has added life to the Canadian dollar versus the U.S. While strong oil aids Canadian fundamentals, Canadian interest rates will continue increasing because of inflationary concerns. There is a labor shortage in Canada, which is driving up wages and adding to inflationary pressure caused by higher energy costs and other factors by increasing the medium term cost of goods and the short term buying power of consumers. The proposed GST cut will also add to inflationary pressure and contribute to higher interest rates. Higher interest rates improve interest in owning Canadian dollars. The other core fact about the Canadian dollar to bear in mind with your startegy is that the Canadian dollar is worth more in the future than it is today. In other words, people are willing to pay a premium to buy futures dollars versus spot. That tells me currency markets are long term bullish on the Canadian dollar versus the U.S. The September futures contract is worth 0.27% more than the May and the September 2007 dollar is worth 1.3% more than the May dollar. Not only is the trend not your friend if you are deferring receiving U.S. income; if you have any debt it is costing you to not take the money and Google is not paying you interest. This is especially true of any unpaid balances on credit cards. Furthermore, if you are debt free, letting Google hold your money without paying you interest eliminates your chance to take the money and put it into some form of investment, where you stand a long term chance of making 8% to 10% per year. Simply put, I think this is a mistaken strategy. The potential gains are not as large as the potential costs plus the foregone opportunities.
If the exchange rate jumps from 1.13 to 1.15 next month (extremely unlikely) then you get an extra $2 on US$100 or an extra $20 on a US$1,000 Adsense payment. What if the exchange rate goes down? The returns are too small to postpone payment & gamble on exchange rates.
Guys, why don't you open a US dollar account at your branch? Thats what I did, and I also have a US dollar Visa to make online personal and business purchase IN US Dollars without converting at all. Clancy is correct, don't hold your payments with Google. Deposit them into a US $ account of somekind.
I have one, but Google only pays in Canadian $ either through EFT or check. Anyways, thanks for all the replies everyone, but I wasn't able to put my payment on hold anyways as you have to have it on hold before the 15th of the month.