collapse of the euro

obsessed_saver

mike88 wrote: »

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

Maybe angus1024 has the view that the GBP has more to fall against the EUR?

john.xs

sorry to hijack thread but i was wondering what others would do if they had say 500 euro? ill probably go on a trip /hol to euroland in next year. so would you just keep hold of them so as not to incur further transaction charges and as the pound looks weak against other currencys.

cos69

The pound may be bombed out but there is nothing to say that the decline will not continue, especially now that interest rates are being controlled by the government. With UK ministers talking about further rate drops to zero if necessary whereas the ECB is talking about freezing rates after January, then the downward trend will continue into the new year. Could we see £2 = 1 euro, I never thought we would see parity !

cos69

john.xs wrote: »

sorry to hijack thread but i was wondering what others would do if they had say 500 euro? ill probably go on a trip /hol to euroland in next year. so would you just keep hold of them so as not to incur further transaction charges and as the pound looks weak against other currencys.

If your going to euroland in the next 12 months keep it, although you might find a holiday outside euroland might be cheaper

LesU

angus1024 wrote: »

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.

If the Euro strengthens much further it will put Euroland at a severe disadvantage with the rest of the world. It is therefore unlikely, in my opinion, that you will see much more than 5-10% further falls in the pound. If that is the case then the difference between buying and selling rates that you get with banks would wipe out at least 5% of any possible gains.
You then also have the scenario where the pound starts to rise again. By the time that you have realised that it is a definite upward trend, it will be too late. You will either make no gains or a significant loss depending on how fast you react.
To make any decent money on exchange rates you need to see significant readjustments followed by a period of (relative) stability e.g pound against Euro/dollar during the last 3 months. These events don't happen all that often.

cos69

LesU wrote: »

If the Euro strengthens much further it will put Euroland at a severe disadvantage with the rest of the world.

Its not this way round - the Euro is not strengthening, the pound is falling against the Euro and the $ .

Apreciar

cos69 wrote: »

Its not this way round - the Euro is not strengthening, the pound is falling against the Euro and the $ .

It is the euro that is strengthening against the dollar and pound. But, as I posted earlier the forex traders in the States are putting their money on the ECB lowering rates in Europe, this will have the effect of weakening the Euro. The bet here in the UK is wether the weakening will be enough for the pound to benefit as our economy is so shot at the moment and will be for longer than most developed economies.

angus1024

Thanks,
I will look at your posts.

I have been plotting various currencies against each other with time and it is interesting. At the start of the oct 1 pound was worth 1.25Euros and now its about 1.,05 euros, so if I had managed to buy euros in sep and changed them back now I would have made (approx) 20% profit.

LesU

cos69 wrote: »

Its not this way round - the Euro is not strengthening, the pound is falling against the Euro and the $ .

As Einstein said, "It depends on where you are standing". It's all relative!

beingjdc

Apreciar wrote: »

It is the euro that is strengthening against the dollar and pound.

A year ago, the pound was worth $2, and €1.35. It is now worth about $1.5 and €1

The dollar was worth €0.67 and is now worth €0.71.

So in fact over the last year the pound has fallen against everything, and the dollar has strengthened slightly against the Euro.