Buying Euros

superglue922

Excuse my naivety, and I'm sure there must be a reason not to do it, but I've had a cunning plan.
I am about to be made redundant and will have approx £10,000 left to play with. I can buy Isas etc. but what about this:
At the moment the rate of exchange is 1.10 Euro = £1.00
So if I bought £10,000 of Euros I would get 11,000 Euros.
If I sat on them until the ROE increases to say 1.30 these Euros will be worth approx £14,300. Less any commission.
That is always assuming the euro will increase against the pound, but it seems a good return. Am I over simplifying it?

purch

If you bought Euro's at 1.10 and sold at 1.30 you would make a LOSS of 20 cents per £


£10,000 @ 1.10 = EUR 11,000

EUR 11,000 @ 1.30 = £ 8461.54

ray123

You can buy at 1.16

superglue922

Thanks for that!
Not one of my best ideas.

cos69

... too true, and that does not include the spread between the buying and selling price

MumOf2

Ray 123 - where can you buy at 1.16? I have to get some in a few weeks and that would be a great rate!

MumOf2

jamesd

It's a bet that the Pound will get weaker, when the trend is that the Pound has been getting stronger. It's also a recklessly high risk to be taking in your situation unless you're already intimately familiar with the currency markets, and you clearly aren't.

atypical

MumOf2 wrote: »

Ray 123 - where can you buy at 1.16? I have to get some in a few weeks and that would be a great rate!

MumOf2

Check here. Interchange FX are currently offering 1.161 though delivery charges can wipe out any gain.

You should also look here.

musehead

You can get about 1.18 today if you withdraw cash using a Nationwide debit card abroad.

standinman2009

check bloomberg the trend is upward my guess is itll 1,25 to the pound very soon

worbikeman

Essentially you are placing a £10,000 bet that the Euro will become more valuable against the pound in future. No-one can predict the future!