Nearly half of all Canadians who travel across the border purchase U.S. dollars whenever they need them, regardless of the exchange rate, according to survey from Royal Bank of Canada.

“With the strong Canadian dollar, people are shopping south of the border, taking more time to travel abroad and not really thinking about the cost of buying foreign currency, especially U.S. dollars,” says Max Thompson, head of GICs and savings. “Instead of planning ahead, many Canadians get caught by fluctuating currency rates and can lose money by exchanging funds at inopportune times.”

The RBC poll asked Canadians how they manage their U.S. dollars, and despite the significant number of Canadians who travel abroad and use U.S. dollars, only three in 10 Canadians regularly save them in an account for travel purposes.

Among those Canadians who do save U.S. funds, 64% keep their U.S. cash at home. In fact, just one in three (32%) Canadians who use U.S. dollars abroad monitor exchange rates and wait to purchase U.S. dollars when it is favourable.

Interestingly, Canadians age 54 and older are more likely to keep their travel funds in a U.S. dollar bank account (43%), compared to those age 35 to 54 (32% and those age 18 to 34 (29%). In addition, men (43% are more likely than women (30%) to keep their money in a U.S. dollar bank account, while women (59%) are more likely than men (45% to keep it at home in cash.

In looking at travel habits and U.S. dollar usage among Canadians, almost 720,000 (3%) travel across the border or to another country that accepts U.S. dollars at least once a month, while one fifth (17%) of respondents travel abroad to countries that accept U.S. dollars a few times a year. About 20% of Canadians travel outside of the country about once a year where they accept U.S. dollars.

“Considering the number of Canadians who travel abroad and need U.S. dollars, purchasing them when exchange rates are favourable and placing them in an account to capitalize on interest is better than waiting until the last minute or having cash sit in a drawer at home collecting dust or getting lost,” says Thompson.

The poll also looked at what Canadians do with their U.S. dollars once they return home from a trip or vacation abroad. Only 16% put the leftover money in their U.S. bank account.

These are some of the findings of an RBC poll conducted by Ipsos Reid between March 13 and March 18, 2008. This online survey of 2,020 adult Canadian bank account holders was conducted via the Ipsos I-Say Online Panel, Ipsos Reid’s national online panel.