Reply to: Black Monday - the beginning

[Moscow Mule]

All you really need though is GBP/EUR spot fx rate, forward fx rate, GBP interest rate, EUR fx rate. Of course those 4 should be linked...

You also need to know how much you're intending to spend on holiday.

For a fortnight in Monte Carlo, it might be significant. For a week on the Costas, probably not.

[BrilloPad]

As I said, I haven't done the sums (nor could I without much more data).

All you really need though is GBP/EUR spot fx rate, forward fx rate, GBP interest rate, EUR fx rate. Of course those 4 should be linked...

[Moscow Mule]

Moscow,

'Quote:
Originally Posted by techno
So should I now get some Euros for the summer holidays in Europe or wait.....?

If you've got the means to gain interest on it before you spend it then probably yes. If not, no. ',


you therefore believe that todays exchange rate of:

1Euro = 77.5GBP


will not change, or if it does the GBP will strengthen ?

That is what you are saying is it now ?


Milan.

No not my point at all. You need to work out how much interest you'll get before you need to spend the money (either in GBP or EUR). If you're converting to EUR as a holidaymaker, I'd suggest you'll be making zero interest on your EUR in that time.

You need to work out what your GBP will be worth in 6 months (or whenever) if you leave it in your account and what the interest rate will be when you exchange it.

MY OPINION is that the amount of interest made in that time will be more than the gains you would make by converting now.

As I said, I haven't done the sums (nor could I without much more data).

[milanbenes]

Moscow,

'Quote:
Originally Posted by techno
So should I now get some Euros for the summer holidays in Europe or wait.....?

If you've got the means to gain interest on it before you spend it then probably yes. If not, no. ',


you therefore believe that todays exchange rate of:

1Euro = 77.5GBP


will not change, or if it does the GBP will strengthen ?

That is what you are saying is it now ?


Milan.

[Moscow Mule]

So should I now get some Euros for the summer holidays in Europe or wait.....?

If you've got the means to gain interest on it before you spend it then probably yes. If not, no.

[Moscow Mule]

'it in GBP as it'll sort itself out over the longer timeframe'


you reckon, rather you than me !

still I guess someone has to hold them (£)

Milan.

All my bills are in GBP - the only reason for me to hold EUR is speculation. In which case, I'll have a spread bet.

[techno]

... holiday cash

So should I now get some Euros for the summer holidays in Europe or wait.....?

[milanbenes]

'it in GBP as it'll sort itself out over the longer timeframe'


you reckon, rather you than me !

still I guess someone has to hold them (£)

Milan.

[Moscow Mule]

You mean soft arbitrage rather than hard arbitrage?

I'm unsure of the exact terms. My point is;

It's worth taking the lower EUR rate of interest if you think you'll need the EUR (to pay for something) in the next 0-12 months as the GBP-EUR rate will get worse over that period, making the extra GBP you make not worth it.

If you don't need to spend EUR over that timeframe, keep it in GBP as it'll sort itself out over the longer timeframe.

All IMO, IANAIFA, I have not done the exact sums involved etc etc.

[BrilloPad]

It depends on how you view the GBP position against EUR. If you need the money in EUR now, I'd do it now.

If you need the money in EUR withing the next 0-12 months, I'd do it now.

If you're speculating you can make your own decisions

You mean soft arbitrage rather than hard arbitrage?

[bobhope]

First the good news:

Due to the pound's performance over the past month or so, my portfolio (in GBP terms) has gone up > 50k

Bad news (for you GBP-based contractors):

Get used to holidaying in Skegness

[milanbenes]

eh ?

Milan.

[Moscow Mule]

A question for those of us who don't follow the finanicial world as closely as some of you; would this be a good day for me to transfer money from my Sterling bank account to my euro one? Or should I wait?

It depends on how you view the GBP position against EUR. If you need the money in EUR now, I'd do it now.

If you need the money in EUR withing the next 0-12 months, I'd do it now.

If you're speculating you can make your own decisions

[HRH]

look at the AU go !!

I just read that JP Morgan bought bear stearns for 115m GBP

classic

also, was reading at the weekend that some mega investor bought 10% of bear steans last september

As of friday he was down 800m U$ !!!


Milan.

Talk sport listener?

[SizeZero]

A question for those of us who don't follow the finanicial world as closely as some of you; would this be a good day for me to transfer money from my Sterling bank account to my euro one? Or should I wait?