collapse of the euro

donmax777

Hello,
Can anyone please advise me on what i should do in my situation.
I have 100k invested in nationwide e.savings account(at moment earning 3.05% gross) and 5k in flex account. i am living in Spain at the moment and need to pay rent,etc in euro's from my sterling account.Should i move my investment? and what can i do counteract the effects of the continuing decline of the euro (now down to £1 = 1.02 euro)
Thankyou.

ic

Its the pound that's declining, not the euro. The euro is now strong, meaning it will buy more pounds for the same number of euros.

Cook_County

It's obviously good news then in these circumstances that Spain has abolished wealth tax.

DireEmblem

Cook_County wrote: »

It's obviously good news then in these circumstances that Spain has abolished wealth tax.

its not good news as she was transfering savings from a GBP account to pay an EUR expense...

Pound gets weaker, EUR bills become more expensive...

Cook_County

DireEmblem wrote: »

its not good news as she was transfering savings from a GBP account to pay an EUR expense...

Pound gets weaker, EUR bills become more expensive...

I disagree. It is good news because the Euros are becoming more valuable so closer to the wealth tax threshhold, but now it has been abolished it is not going to have to be paid.

ashbourne

are there any loopholes or ways around this situation?

I guess there probably isn't but i have similar problems paying bills in euro's .

Some kind of defering maybe..

Blah99

If you live in a foreign country you should hold a significant amount of your cash in the local currency. Many people keep their cash in sterling because "that's what I'm familiar with/used to", but it's a bad decision as you're exposed to these kinds of currency fluctuations.

My opinion: if you can stomach another 10% drop in the £:Euro, leave your cash in sterling until exchange rates rebalance themselves. If not, exchange 3 to 6 months of sterling to euros now (accepting the poor rate) to hedge against further short term devaluation of the £.

Stompa

Leaving aside the Euro issue, is there any particular reason why you've chosen to have £100k in a variable rate account earning a low rate of interest (which will undoubtedly go lower still)?

Apreciar

At the moment there is not much you can do. However, the interest rate in euroland will need to go down soon as the recesion hits, at that time there will be a slight improvement in rates; although not that much. It is now a case of grinning and bearing it I am afraid.

I bought in Tenerife some seven years ago and stached a fair amount of cash there at 1.58 to the pound but bear in mind that interest rates over there are not so good and so I lost a little compared to having the cash here.

angus1024

I have been watching the pound go down against the Euro and wonder if its possible to buy Euros and later change them back to GBP. Does anyone know how you can do this?. One possibility is to open an international bank account in Euros - but the exchange rate is poor (you lose about 5% if you change to euros and back to pounds).

Trivially the above assumes the pound will sink further.

mike88

Unless its me I think the above poster may be a little confused.

The last thing anyone wants to do is convert bombed out pounds into overvalued euros. So why would anyone want to buy euros at this time when the pound will buy 20% fewer euros than a couple of months back.

That represents an immediate significant loss. And if the euro weakens (as it surely will taking a 12 month view) and conversion into pounds is required, that will compound the loss not to mention the conversion costs.

The above post makes absolutely no sense to me but perhaps someone can enlighten me?