I am terrified - these are my life-long savings

qamwc1

The Rouble is also falling - the Russian government is spending currency reserves to support it. Perhaps property prices will fall in due course.

Sterling was probably overvalued anyway partly due to the asset price bubble we had. It has probably fallen further than the level it will eventually settle at - when that happens, don't know! We forget that Sterling has been this low against the US$ even in non-recessionary times.

Fly Baby - you are where you are. The current climate means that the ability to make life choices is curtailed. People will now be saying what choices can I no longer afford and that will leave them with the one they can afford - they may not be totally happy but they'll hopefully they will feel positive that they will get through to the other side. You still talk about buying a property - perhaps the answer is to sit tight and if you feel uncomfortable about Sterling swap to Euros or another currency you feel will weather the storm. There is no right answer - we are in this mess because of human behaviour and if we could predict the outcome of mass human action then we wouldn't be in this mess.

Reaper

What you really want to know is whether the £ will get stronger or weaker. I'm sorry but nobody can tell you that. If it was known for a fact it would definately get stronger or weaker then it would have already happened because speculators would have all moved into/out of that currency in advance. Many economists and traders have opinions but nobody knows for sure.

If the choice is Russia or UK then one option is to split your money between the two countries. One will do relatively better and one will do relatively worse so at least you reduce the effect of a big downturn on either side (though you will also have reduced the effect of a big upturn too).

Fly_Baby

blackswan2 wrote: »

The pound is already at a low against the euro, do you want to assume it will fall significantly further or sit tight and hope it bounces back a bit?

Perhaps at some stage you could start a regular euro savings account so you transfer some of your sterling to euros in small regular amounts, minimising your exposure to short term currency fluctations?

We are saving a fair amount each month - maybe about 1000 pounds from my and my husband's salaries - maybe I should start a Euro saving account instead of making new deposits into my old sterling ones.

Fly_Baby

Reaper wrote: »

What you really want to know is whether the £ will get stronger or weaker. I'm sorry but nobody can tell you that. If it was known for a fact it would definately get stronger or weaker then it would have already happened because speculators would have all moved into/out of that currency in advance. Many economists and traders have opinions but nobody knows for sure.

If the choice is Russia or UK then one option is to split your money between the two countries. One will do relatively better and one will do relatively worse so at least you reduce the effect of a big downturn on either side (though you will also have reduced the effect of a big upturn too).

Reaper, Russia is in panic right now over predicted further rouble devaluation and possibly denomination, with people withdrawing their savings from banks and hastily converting roubles into dollars. So if I choose between currencies it cannot be rouble.

I feel helpless. I was never trying to be greedy, I never wanted to make money out of my savings, I have been just saving to buy a home. I feel plain cheated. I realise though that many people are in a much worse situation.

arfabrane

Fly_Baby wrote: »

We are saving a fair amount each month - maybe about 1000 pounds from my and my husband's salaries - maybe I should start a Euro saving account instead of making new deposits into my old sterling ones.

Maybe, or maybe not - after all, if you put £1000 into Euros today, and the pound gets stronger against the euro tomorrow, you have effectively lost money. No-one can accurately predict currency fluctuations, and transferring money between currencies is merely a form of gambling. After all, if we all knew 12 months ago what we know now, I'm sure everybody on here would have converted all of their savings into US dollars!

Reaper

You are planning to live in either the UK or Russia. Therefore buying Euros is a bad idea. You are exposing yourself to needless risk of currency fluctuations by introducing a 3rd currency.

Save your money in sterling or Roubles. I would favour whichever country you think you are most likely to end up in. Or both.

EDIT: Since you are worried about Roubles I think I'd stick with sterling. There is risk whatever you do. There is least risk if you stick with a currency in a country there is a chance you will be staying in.

arfabrane

Agreed - the first thing you need to decide is whether you're staying here or moving back to Russia. If you are still undecided, you could invest identical amounts in sterling and roubles - at least that way, any fluctuations in currency value would be negated

CLAPTON

Sadly people usually sell when things look awful i.e. sell stocks and share after they fall, convert currency after its fallen, stop paying into pensions because they have fallen in value. etc..

so no... as far as history and experience goes what goes down will come up again.

In any case Russia is just starting to collapse fiancancially; unless the price of oil goes up again, the russian currency will go into free fall.

Or of course maybe not.

tweet

You'd think the further fall in the £ would be priced in by speculators but then you'd think the housing crisis and stock market tumbles would also have been priced in. In fact all available news is priced into all prices, but that would mean prices are equal to their value; was oil really worth $150 or whatever it was at it's peak? Had the fundamentals changed (neither supply nor demand have really) we'd see a shift- they haven't yet it's dropped by half.
Germany, UK, USA, Hong Kong, many places are in or heading for recession - that doesn't mean prices are exactly reflecting this information, it's more than that.

Yes, the £ will weaken further /against the dollar/ until the latter weakens too. They're relative to each other so both can't weaken together (against each other- maybe against the yen or whatever, but that neither concern nor matters to you). Thus looking at the Euro area as a whole, yes it may enter or be in recession, but compared to what in the currency markets? I'd see Russia as a place with further to fall mainly because it's an emerging market and these tend to sway up and down much further, and though they've seen falls greater than many places I'd still see, in a conservative credit market world, funds being pulled from there - weakening the R - to perceived safety of the £/$/$. While markets may be falling with currencies what matters is how they fare against each other.

Personally I'd not risk money in things I don't understand - I don't know the forex, I don't know Spanish property, art or wine, so I don't invest in them. Seeing as you have to make a choice look into minimizing risk, not necessarily maximising profit in these uncertain time when your capital is at risk. Maybe splitting it £/euro/R or how you see fit.

Now would be a good time to be in Euros if converting to the £, but as you're not don't try chasing after lost opportunities, that's how personal investors get burned time and time again. Good advice to keep monies in the currency you think you'll be surrounded in in the future,personally I think it's too much of a risk to what amounts to gambling your savings away just to safeguard your capital.

Good luck with it!

Fly_Baby

arfabrane, CLAPTON, tweet - many thanks for your posts!