Euro vs Sterling exchange rate trend in the near future?
Discussion
I'd be grateful for any advice as to how the Euro vs Sterling exchange rate may fluctuate in the near future (i.e next 3 months or so).
We're in the process of buying a house in France (well, someone has to?) and paying in Euros so obviously this could have a very significant impact on the cost to us.
Many thanks for any advice.
We're in the process of buying a house in France (well, someone has to?) and paying in Euros so obviously this could have a very significant impact on the cost to us.
Many thanks for any advice.
Some of the greatest minds in finance are asking themselves that very question right now....and no one really knows except a few German and French politicians.....and I suspect even they don't know.
Following the news of out Germany today all bets are off.
Following the news of out Germany today all bets are off.
Edited by Beardy10 on Wednesday 19th May 23:39
Beardy10 said:
Some of the greatest minds in finance are asking themselves that very question right now....and no one really knows except a few German and French politicians.....and I suspect even they don't know.
Following the news of out Germany today all bets are off.
HaHaHa!!! This man speaks the truth. I haven't got a fFollowing the news of out Germany today all bets are off.
Edited by Beardy10 on Wednesday 19th May 23:39
king clue where the thing is goin and I watch it every day.David Blanchflower said it was likely to go to parity with the Us Dollar and I'd heard other remarks about .84, but as for the GBP/Euro rate stick a pin in a map and when you find out let me know!;)
Whilst the euro continues to be dogged by uncertainty about the cost of bail-outs for Greece and possibly others, and the general state of European finances, so Sterling too has more than its share of problems. The USD has appreciated against the euro recently and historically one might have expected GBP to do the same, however there is still a great deal of nervousness surrounding the Pound. Looking forward, if the market can be convinced that the new UK administration is going to be able to both stimulate growth and reduce the deficit, Sterling should appreciate. Personally, I think that the euro's problems are far more fundamental and difficult to resolve, and so long-term, will appreciate against the euro.
In the case of what to do over the next three months; if you like the roller-coaster ride of not knowing how much your house is going to cost from one day to the next, then keep an eye out daily and be ready to pull the trigger, otherwise I would look to buy forward if the sums add up now.
In the case of what to do over the next three months; if you like the roller-coaster ride of not knowing how much your house is going to cost from one day to the next, then keep an eye out daily and be ready to pull the trigger, otherwise I would look to buy forward if the sums add up now.
Thanks for that Chris.
I'd been figuring the same....and have now made the mistake of installing XE on my BlackBerry this evening and keep checking every few minutes (stupid I know!)...
The only thing I didn't understand (not being very savvy with these things) was what you meant by "buying forward"?
I may be paying the 10% deposit on Thursday and have no choice about the timing of that. However, when it comes to completion, as I understand it, I could watch the rates and agree a rate fixed at what I think may be favorable but in advance of the completion date. Is this "buying forward"?
Thanks again.
I'd been figuring the same....and have now made the mistake of installing XE on my BlackBerry this evening and keep checking every few minutes (stupid I know!)...
The only thing I didn't understand (not being very savvy with these things) was what you meant by "buying forward"?
I may be paying the 10% deposit on Thursday and have no choice about the timing of that. However, when it comes to completion, as I understand it, I could watch the rates and agree a rate fixed at what I think may be favorable but in advance of the completion date. Is this "buying forward"?
Thanks again.
Buying forward means that you are agreeing a price today, for a given amount, but for delivery and payment on an agreed date in the future.
Let me give you an example; you agree a purchase price for your house in France, lets say €250,000 and you have to transfer to the Notaire 10% which you can buy today at 1.1750. What I would suggest is that at the same time you "fix" the rate for the balance of €225,000 for delivery in say two months when you are likely to complete the purchase. By doing this, you take out the risk that the rate will drop from now until completion. The common cry then is "but what if it goes up?" well I would ask is it a house purchase, or a large punt on the FX market that you are after? If it goes up then yes, you would miss out but in my mind knowing and fixing your costs from the outset makes this the sensible option. Bear in mind that as you have now committed to the purchase, each one cent change in the rate would be affecting you costs by nearly £2,000 on the size transaction I have used as an example.
PM me if you like, I do this as for living and happy to run through it in detail
Let me give you an example; you agree a purchase price for your house in France, lets say €250,000 and you have to transfer to the Notaire 10% which you can buy today at 1.1750. What I would suggest is that at the same time you "fix" the rate for the balance of €225,000 for delivery in say two months when you are likely to complete the purchase. By doing this, you take out the risk that the rate will drop from now until completion. The common cry then is "but what if it goes up?" well I would ask is it a house purchase, or a large punt on the FX market that you are after? If it goes up then yes, you would miss out but in my mind knowing and fixing your costs from the outset makes this the sensible option. Bear in mind that as you have now committed to the purchase, each one cent change in the rate would be affecting you costs by nearly £2,000 on the size transaction I have used as an example.
PM me if you like, I do this as for living and happy to run through it in detail
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