Making money on the weak pound

chicka007

G'day all,

I'm an Aussie expat that has lived in the UK for about 3 years. I have about AUS$22,000.00 over in an Australian building society, which has taken a huge hit on the intrest rate front over the past 6 months. I've recently noticed the Aussie dollar is very strong against the GBP. I think it's about 20% stronger now than a couple of months ago.

My question is - should I be looking to transfer my money across to an intrest bearing account over here in the UK to take advantage of the exchange rate. I suppose the gamble is first that the GBP will strengthen back to it's traditional AUS$2.40 and second the fees associated with the transfer won't eat up any profit. I suppose the other thing I can do is nothing and leave it where it is. What would you do if you were in my position?

I appreciate any information/advice anyone can provide.

Cheers,

Chicka

Twickenham_Green_FA

Hi there,

I don't know what kind of interest your banks are offering, but over here isn't not good either! Having said that, interest rates over here could raise rapidly, thereby improving the rates of interest the banks will offer.

An important question would also be if you need the money right now and will you be going back to austrailia in the near future?

Gut reaction is to leave where it is, unless you need it over here for some reason. It's high risk trying to take advantage of currency differences.

laffer

It depends on whether you intend to say here longer or revert back to Oz in the short to medium term. Interest rates in oz, although they have come down alot in recent times, are still a great deal better than UK rates. You could easily find an internet saver account with 4.5-5% interest in Oz so I tend to think it would be better to leave your money there.

The AUD is doing well at the moment against the Pound but on my purely amateur view I do not think the Pound will crash through the $2 mark (at least I hope not for selfish reasons) so if you were to bring your money over now and need to convert it back I think you could be losing some of it on the conversion back.

mrposhman

laffer wrote: »

The AUD is doing well at the moment against the Pound but on my purely amateur view I do not think the Pound will crash through the $2 mark (at least I hope not for selfish reasons) so if you were to bring your money over now and need to convert it back I think you could be losing some of it on the conversion back.

You do know you just contradicted yourself right??

Surely if your view is that the £ will not crash through the $2 mark, then it would be better to transfer now as the downside (in your opinion is limited).

The OP's view is that he could bring it over here whilst the AUD is high and the £ is low. If you do not think it will get much lower then the upside potential surely outweighs the downside.

To the OP. If you feel the AUD will decrease against the £ in the time that you will be in the UK then transfer it over, but remember in any calculations that you make ensure that you take into account the difference in interest rates between here and Oz and any transaction fees. Looking at the amounts quoted then the fees won't be great, especially if you use a proper currency broker. I use HiFx for mine and they have been very good in my experience.

laffer

Indeed I have (assuming that the OP wants to convert it back to AUD eventually). Acccept my apologies Mr. Poshman.

mrposhman

laffer wrote: »

Indeed I have (assuming that the OP wants to convert it back to AUD eventually). Acccept my apologies Mr. Poshman.

Easily done, sure I've done that in some of my posts before.