Should i nove now to take advantage of Strong Euro?

andrewm4894

Hi All, really hoping to get peoples view on this one.

I'll start with my predicament - starting a Masters Degree by distance learning in January cost GBP8,640.

I currently have around EUR11,000 (towards a deposit on house, probably buying mid to late 2009 - depending on market, of course)

Given the current (relatively more favorable then some months ago) exchange rate of EUR to GBP at 0.811, i'm starting to ask myself if i should cancel my term deposits (negligible fees) and get all my EUR11000 into GBP (one way bet is it not?..?) to have for my college fees.

I'll be paying the college fees per course in case i need my deposit by mid 2009 (in that case will have to turn some of saving back to EUR) otherwise I'll hope to build the deposit from saving in 2009. Either way I'm going to be spending £8,640 on college fees over the next 2 years.

Essentially all that matters here (that i have no control of) is how EURGBP will develop, currently at 0.811 - do you think it will/can go higher (how much and why?)
or will it decline to lower levels. for example, will ECB rate cuts late 2008/ early 2009 lead to a falling of the 0.811 to more historic levels (say 0.70 to 0.77).

Feel free to give your opinion, both on what you would do in my situation and how you think EURGBP will/might develop over the foreseeable future.

Cheers for reading

Time Magazine

Moving to Investments & Markets. It's the appropriate forum and you're more likely to get replies.

Nobody knows what will happen to exchange rates: please don't take anything as financial advice.

andrewm4894

Antithetic wrote: »

Moving to Investments & Markets. It's the appropriate forum and you're more likely to get replies.

Nobody knows what will happen to exchange rates: please don't take anything as financial advice.

Don't worry anyone - I'm not taking anything as financial advice...Just throwing the question out there to see what factors people feel i may be failing to take into account.

Jivin Turkey

EUR v GBP is close to an all time high. If you have committed to doing this course your demand for GBP is certain, locking in the price now is not speculating, quite the opposite. You will also use pretty much all of your €11000 (£8900) in your first year when you factor in living costs.

If you are holding off in the hope that the rate may go even better, you are opening yourself to a massive exposure of a down turn (which looking historically would be pretty big!).

Another bonus is that GBP deposits will attract higher rates of interest than EUR deposits (if that is where you hold the money now).

Why are you holding onto this money to put a deposit on a house? Again you are speculating that the market will improve sufficiently to your liking.

Get your college work out of the way before looking to purchase a house, you'll find it much easier as you'll be earning more from being more qualified. Rent in the meantime, it gives you more flexibility if your new qualifications open up any doors for you.

andrewm4894

I'm also wondering where would be best to put this £8,640 once i convert my euro? i have been on to two of the banks i use and it seems there is not much they can do for me (e.g. let me leave the sterling in my current account or even open a foreign currency account)...a bit surprised

Goodluck2me

You should open a savings account to get the best rate possible, i heard on here recently that Halifax were doing some very good deals with regard to this so I'm sure you could find something along those lines.

In response to the 1st reply, you are better to lock in the rate now if you feel that is a rate which you would be happy with and could afford. If you adopt a wait and see approach you would leave yourself vulnerable to severe fluctuations and you become a currency speculator rather than an investor.

All my savings are in GBP

Thankfully I don't need them at the minute so I don't have to take the hit of bringing them back.