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    • MSE Guy
    • By MSE Guy 10th May 12, 4:15 PM
    • 1,628Posts
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    MSE Guy
    0 WOW
    MSE News: Should you buy euros now?
    • #1
    • 10th May 12, 4:15 PM
    0 WOW
    MSE News: Should you buy euros now? 10th May 12 at 4:15 PM
    This is the discussion thread for the following MSE News Story:

    "UK holidaymakers have had an unusual treat over recent months with a strong pound, particularly against the euro ..."

    Read the full story:
    Should you buy euros now?



Page 1
  • Judith_W
    • #2
    • 10th May 12, 5:43 PM
    • #2
    • 10th May 12, 5:43 PM
    Is there a trend for the rate to reduce as it gets nearer the summer due to the number of tourists spending abroad, or as I presume this is such a drop in the economic ocean that it has no impact?
  • mh8748
    • #3
    • 11th May 12, 3:49 PM
    Pound cost averaging
    • #3
    • 11th May 12, 3:49 PM
    Probably best to buy some now and then the rest will be at the point of purchase (debit / credit card) when you're abroad.

    As an aside, I like how the 3 experts completely dodged the answer! However, with the Euro crisis lurching from the sanctity of 'head in sand' to complete panic, it's rather difficult to predict. Though I wuld point out that the long term average of $/£ has tended to be 1.6$/£...
  • Alison1968
    • #4
    • 12th May 12, 9:57 AM
    • #4
    • 12th May 12, 9:57 AM
    I think the only thing that's certain when it comes to the Euro is... uncertainty!
    • GTG
    • By GTG 12th May 12, 4:34 PM
    • 422 Posts
    • 55 Thanks
    GTG
    • #5
    • 12th May 12, 4:34 PM
    Euro Crash
    • #5
    • 12th May 12, 4:34 PM
    Take a look at the depictions of waterfalls in the charts of european bank shares, especially Spanish and Greek banks then decide whether you want buy euros. There is a very real possibility one may end up with either worthless paper at worst or at best, paper which is worth a lot less IMHO.
  • prem0132
    • #6
    • 15th May 12, 6:02 PM
    • #6
    • 15th May 12, 6:02 PM
    I bought at 1.23 euro to the pound today for our holiday in a month but now I am worried I should have waited. My husband thinks we should have and I'm thinking we are going to miss out now if it goes up. Its driving me crazy!
    • Porcupine
    • By Porcupine 15th May 12, 11:37 PM
    • 674 Posts
    • 376 Thanks
    Porcupine
    • #7
    • 15th May 12, 11:37 PM
    • #7
    • 15th May 12, 11:37 PM
    Is there a trend for the rate to reduce as it gets nearer the summer due to the number of tourists spending abroad, or as I presume this is such a drop in the economic ocean that it has no impact?
    Originally posted by Judith_W
    I've been watching rates for a few years now, and haven't noticed such fluctuation. Forex rates generally depend on the values of interest and inflation rates in each currency (if inflation is 10% in country A and 20% in country B, country B's currency will get progressively weaker. But if interest rates are 10% in A$ and 30% in B$ then you'd make a profit by being in B, so everyone will buy B$ and it will get stronger, cancelling out that profit), and the relative performance of their economies (or perceptions thereof).

    The quandary at the moment for the Euro depends where you're going. If you're going to Germany, their currency (the Euro, maybe minus a few countries) might remain strong and so today's weak Euro means you get a good deal. If you're going to Greece, they might end up being in neo-drachma by the summer and then you'd have to consider converting Euro to drachmas. If you did, the drachma would probably devalue compared to the Euro (this after all is the whole problem) and you'd get a better deal than today (neglecting charges, anyway)... but whether you'd get a better deal compared with converting from pounds to drachma at the last minute, who can say?

    But of course, anything that goes up can come down, or go further up indefinitely. And saying things like 'Germany has a strong currency' might be generally true but that's no use in deciding what to do when you fly on the 1st August... the ripples from a Euro breakup could be days or they could be years... nobody knows.
    • Doshwaster
    • By Doshwaster 16th May 12, 12:36 AM
    • 4,768 Posts
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    Doshwaster
    • #8
    • 16th May 12, 12:36 AM
    • #8
    • 16th May 12, 12:36 AM
    I bought at 1.23 euro to the pound today for our holiday in a month but now I am worried I should have waited. My husband thinks we should have and I'm thinking we are going to miss out now if it goes up. Its driving me crazy!
    Originally posted by prem0132
    Look at it this way. If you changed, say, £500 then the difference between 1.23 and 1.28 is £25 - not an insignificant sum but not enough to lose sleep or go crazy over either. You are still getting far much more for your money that you would last year.
  • prem0132
    • #9
    • 16th May 12, 6:55 AM
    • #9
    • 16th May 12, 6:55 AM
    Thanks doshwaster I needed a voice of reason!
    Last edited by prem0132; 16-05-2012 at 1:57 PM.
  • Sarahcat
    Euros
    We're off to Europe in September travelling first to sunny France and then back up into Germany.
    We have decided to buy half our euros now and the rest nearer the time.
    As we self cater and will need to buy petrol etc we don't want to find we've completely missed out on these better rates if something drastic happens by September.
    That said we definitely order £500+ always as that means free delivery by most exchanges.
    • BobbinAlong
    • By BobbinAlong 16th May 12, 6:01 PM
    • 154 Posts
    • 147 Thanks
    BobbinAlong
    I topped up my Thomas Cook Cash Passport card with euros last week at 1.2 for next month's trip but if it goes up again, I'll add some more - another form of saving that might give a better return than the bank!
    • thelawnet
    • By thelawnet 16th May 12, 8:59 PM
    • 2,437 Posts
    • 1,686 Thanks
    thelawnet
    I topped up my Thomas Cook Cash Passport card with euros last week at 1.2 for next month's trip but if it goes up again, I'll add some more - another form of saving that might give a better return than the bank!
    Originally posted by BobbinAlong

    You'd do better with the Travelex Cash Passport Globe card....
    • davehills
    • By davehills 16th May 12, 10:11 PM
    • 403 Posts
    • 327 Thanks
    davehills
    Buy Euros if going on holiday, most certainly. You'll get a good deal and one of the cheapest holidays you have ever had.

    However, I personally would not buy Euros as an investment, as was being suggested on the radio earlier.

    Why? Well, the value of a currency is largely based on confidence. I find it hard to believe that confidence in the Euro will increase much in the forseeable future, especially if the likes of Greece bomb out. More likely it will continue to slide.

    IMHO, if that happened it wouldn't take a lot for the currency to collapse altogether, maybe if another country dropped out it could be the trigger?

    Proceed with caution if buying purely for investment..
    • davehills
    • By davehills 16th May 12, 10:13 PM
    • 403 Posts
    • 327 Thanks
    davehills
    If you're going to Greece, they might end up being in neo-drachma by the summer and then you'd have to consider converting Euro to drachmas. If you did, the drachma would probably devalue compared to the Euro.
    Originally posted by Porcupine
    If that occured then the Greeks would be HUNGRY for foreign currency, IMHO. Probably not so much the Euro but more stable currencies such as US dollars and possibly UK Sterling.
  • liamod
    Greece will not have the drachma by the summer. They are holding re-elections in June and the EU will do everything they can to keep them in the euro (especially Germany) otherwise they will default on all their debts causing a big downslide in all European economies and the strength of the Euro. Also if Greece were to leave the Euro it would take them at least 4 months to print their new drachma currency so there is no chance that Greece will be using the neo-drachma this summer
    • Ainsley1
    • By Ainsley1 17th May 12, 8:51 PM
    • 394 Posts
    • 181 Thanks
    Ainsley1
    Don't Panick Mr Manwaring!
    Bobbin wrote "I topped up my Thomas Cook Cash Passport card with euros last week....". You may well have taken advantage of the high rate but do be aware of the risks too that your cash passport company may fail too (perhaps a very small risk) but then it's Thomas Cook....no banking protection here
    Last edited by Ainsley1; 17-05-2012 at 10:25 PM. Reason: corrected typo and finished off as a visitor had arrived!!
    • Porcupine
    • By Porcupine 18th May 12, 1:40 AM
    • 674 Posts
    • 376 Thanks
    Porcupine
    If that occured then the Greeks would be HUNGRY for foreign currency, IMHO. Probably not so much the Euro but more stable currencies such as US dollars and possibly UK Sterling.
    Originally posted by davehills
    Perhaps... but the Greek people don't actually have any money! A few wealthy people will have some stashed away, but not enough to affect pound/Euro or dollar/Euro rates. A possible effect would be further devaluation of the neo-drachma as money flights to 'hard' currencies... potentially creating a forex black market (and so different 'official' and 'street' rates), but I can't see how this would affect anyone other than Greece. Zimbabwe's collapse hardly caused pain at the Federal Reserve or the ECB...
    • scotty1971
    • By scotty1971 18th May 12, 7:37 AM
    • 1,679 Posts
    • 443 Thanks
    scotty1971
    i was just wondering even though we are getting a good exchange rate on the euro,will the tourist resorts not just put up their prices to compensate for this,so it really won't be any cheaper than it usually is?
    • Doshwaster
    • By Doshwaster 18th May 12, 8:56 AM
    • 4,768 Posts
    • 3,889 Thanks
    Doshwaster
    i was just wondering even though we are getting a good exchange rate on the euro,will the tourist resorts not just put up their prices to compensate for this,so it really won't be any cheaper than it usually is?
    Originally posted by scotty1971
    I would have thought that with most resorts struggling for customers then putting prices up would be the last thing they would do.

    Besides, why would they want to "compensate"? If a meal is €40 then how much it costs you is irrelevant to them - in fact the falling Euro is good for them as it encourages more people to visit and spend more money.

    One effect not really discussed however is the likely reduction in the number if Euroland people visiting the UK on holiday. A few years ago London was full of French people shopping. It's not now.
    • scotty1971
    • By scotty1971 18th May 12, 9:09 AM
    • 1,679 Posts
    • 443 Thanks
    scotty1971
    I would have thought that with most resorts struggling for customers then putting prices up would be the last thing they would do.

    Besides, why would they want to "compensate"? If a meal is €40 then how much it costs you is irrelevant to them - in fact the falling Euro is good for them as it encourages more people to visit and spend more money.

    One effect not really discussed however is the likely reduction in the number if Euroland people visiting the UK on holiday. A few years ago London was full of French people shopping. It's not now.
    Originally posted by Doshwaster

    cheers for that explanation,makes perfect sense
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