Convert Euro to pounds and back again

Skag

Hi,

I currently have a euro account with HSBC which holds about 60.000 euros. My thought is, when I find a good GBP/EUR equivalence, i.e. 1 Eur = 0.92 GBP as it happens about once a year, to convert my money into GBP, and then when sterling goes down, convert it back to Euro.

Is this scheme correct? Will it give me any profit? I know there are ways to gamble at this as ForEx etc, however I'm not interested in that at the moment.

Also, what's a good way to find a trustworthy Independent Financial Advisor? I haven't got any friend or acquaintance who knows someone.

DavidHayton

Skag wrote: »

Hi,
I currently have a euro account with HSBC which holds about 60.000 euros. My thought is, when I find a good GBP/EUR equivalence, i.e. 1 Eur = 0.92 GBP as it happens about once a year, to convert my money into GBP, and then when sterling goes down, convert it back to Euro.
Is this scheme correct? Will it give me any profit? I know there are ways to gamble at this as ForEx etc, however I'm not interested in that at the moment.

It looks very tempting, doesn't it? Trouble is that it is impossible to predict future movements in the FX rate. The movements are essentially chaotic: the euro may never reach 92p again in the next 20 years. Or it might go surging through and then never fall back below 92p. (I am now hiding under the table waiting for chartist-folk to tell me that this statement defines me as stupid, but I stand by it). The inevitable problem in this strategy are the fees charged by the FX provider. These will eat into your funds both ways and will ensure that you will lose out on average.

Skag wrote: »

Also, what's a good way to find a trustworthy Independent Financial Advisor? I haven't got any friend or acquaintance who knows someone.

Try http://www.unbiased.co.uk/

Best wishes, David

lvader

Skag wrote: »

Hi,

I currently have a euro account with HSBC which holds about 60.000 euros. My thought is, when I find a good GBP/EUR equivalence, i.e. 1 Eur = 0.92 GBP as it happens about once a year, to convert my money into GBP, and then when sterling goes down, convert it back to Euro.

Is this scheme correct? Will it give me any profit? I know there are ways to gamble at this as ForEx etc, however I'm not interested in that at the moment.

Also, what's a good way to find a trustworthy Independent Financial Advisor? I haven't got any friend or acquaintance who knows someone.

I essentially do this with investment funds. When the pound is strong I buy foriegn funds and when it is weak I move the money back into UK funds. Exchange rates don't tend to just move in one direction, they swing back and forth while moving the average higher or lower. As long as you aren't greedy you can make money on the swings.

Loughton_Monkey

Before doing anything, just take a look at HSBC's 'spread' between buying and selling rates.

That gives you the amount of movement necessary (in the 'right direction) before you are 'in profit'.

Very few people can make money on this is 'forex trading' where the spreads are relatively miniscule. What makes you think you can do it with such gigantic spreads?

P3dro

If your going to do this I'd recommend doing it with a proper forex broker (I'd recomend OANDA, I've used their Demo platform and its great), even if you don't use the leverage available it will make you far more profitable. I'd also suggest checking forexfactory.com out theres freindly folk there who are willing to help out