Sterling/euro exchange rates

[Rob G]

We're due to complete on the purchase of our house in Normandy around November. We're trying to decide whether to convert ouyr personal stake into euros now, or whether to wait and see if the euro weakens any more against the pound. I think I've read somewhere that, if anything, the euro may strengthen slightly against the pound towards the end of the year.

Does anyone have any information about this, or know of a good website with market information about euro/sterling exchange rate forecasts?

Thanks,

Rob

[sue-J]

I'm in the same position , but figured out that it's not a case of how much I can gain if I wait, but how much I could afford to lose if the Euro strengthens. My sale completes in about two months, so I've opened an HSBC offshore Euro account and put the Euros in there. That way I know that I don't have to spend the next eight weeks worrying about rates as the cash is in the bank. On my purchase a change of just 5% in the Euro rate would have added or lost me £8000.00. I'd rather get some sleep at night!

When to buy is the key here, I've kept an eye on euro rates for a couple of months before buying with a simple spreadsheet, which shows the exact sterling I had to find to fund the euro purchase. So the bottom line is, you can either wait and take a gamble, or buy Euros now while the rate is reasonable. But it's quite a gamble, just a penny change in the £/E rate makes a big change in the price you'll eventually pay.

As to rates and forecasts there are plenty of sites, perhaps start with Yahoo.co.uk and click on the Finance link.

Sue (62)

[alnmike]

We used HIFX for our purchase, and bought half our € immediately, and the others just before completion. To split the risk. They will also do a forward trade for you. Do make sure that you have a French bank account ready for your completion, as this will make things easier.

 

[Iceni]

"As to rates and forecasts there are plenty of sites, perhaps start with Yahoo.co.uk and click on the Finance link."

I confess that I am not familiar with the link you quote but it is most unusual to find forecast x-rates. The forward rates usually quoted are simply derived from spot rates mutilplied by interest rate differentials at various future dates.

Sadly there is no magic formula as to when to buy - you pays yr money and takes yr choice.

John

not 

[Mike1958]

When I was purchasing our house last year I became addicted to the commercial FX screens and was watching the rates hourly. This gave me an insight into where the rate was going and also more importantly ammunition to use with the FX companies to force the best rate from them.

I had accounts set up with 3 FX companies and played them against each other. I brought when almost at 1.50 but had budgeted for 1.45 which was worth all of the effort.

The site I used was really useful as other factors are worth watching (euro vs dollar) as this can also impact the euro/pound trend.The good thing is that the graphs were clear and gave the daily and historical rates.

http://www.advfn.com/p.php?pid=forex

Be strong with your FX trader and try and force them to offer more than they will put on the table 1st time, there is usually a band that they can trade within.

Good luck,

Mike

[Eslier]

Take a look at www.moneycorp.com (a very good commercial exchange company) and sign up to receive their daily market brief by e-mail each day. If you read this on a regular basis it will give you an insight into the market forces which dictate the exchange rates. They are currently predicting another cut in UK interest rates around November which, as we get closer to that becoming reality, will be likely to cause sterling to fall against other currencies.

[Ariegoisie]

If you've budgeted for a certain rate and can currently get better then buy forward to tie the better rate in. If the rate gets better then you miss out but if it falls you're protected.

If you want to get a bit more sophisticated and can identify a range in which you would be happy to buy but don't want to fix at a specific point in that range now then you can set up reverse future trades which effectively limit your upside and downside to this range.

I use HIFX for my currency trades and have always found them very efficient.