Euro / pound exchange rates

Collie_Collie

One thing I just can't do is think in strong/ weak exchange rates so I'd like to ask the forum's advice please.
Is now a good time to pay off my small UK rental mortgage by sending the money over from my Dutch Euro bank account.
I'm not asking anyone to predict how exchange rates will move of course, really I'm just asking if I would be paying at the relative top or the bottom of the market. Would it be costing me more in Euros than typically in the past?
I know, I know, I sound a bit dim asking this. I can think in abstract in other fields but exhange rates make me fall asleep.
:think:

mike88

The pound is very weak against the euro at the moment so now is a good time to use your euros to pay off pounds.

DavidHayton

mike88 wrote: »

The pound is very weak against the euro at the moment so now is a good time to use your euros to pay off pounds.

Certainly weaker than it has been, but nobody knows whether the pound will get weaker still, or regain it's former strength ... just like nobody knows next week's lottery numbers.

Personally, I think that the pound will strengthen against the Euro, but I'm not confident enough to borrow 100,000 euro against my house , convert it into pounds and wait for the profits. In fact I'm not confident enough to do it with 100 euro.

In the end it has to be your call on when to convert funds. However, if you want to avoid transferring the lot at the worst time you could convert it in tranches ... but then you won't be able to convert the lot at the best time either.

Best wishes
david

Collie_Collie

Hello David, with my exchange rate 'blindness' though I can see the pound / euro is relatively either weak or strong at the moment - I just couldn't decide which way round it was! So thank Mike for clarifying that for me.

There may well be better circumstances later on but I'll just take the plunge now as rates seem reasonably good historically speaking.
I live and work here so it's not speculating, just changing saved Euros to pounds and I didn't want to do it at a really, really stupid time.

Best wishes,
CC

mike88

Collie. I live in euroland for 4 months of the year so regularly exchange pounds for euros and buy euros even in the UK when exchange rates are favourable. I bought several thousand last Autumn at 1.18euros to the £, it rose to 1.22 a few months back but is now down to 1.13 at the commercial rate and 1.11 or so retail.

I'm not sure whether I agree with David's analysis as the chances are that the euro could get even stronger in the short term as just about everyone is forecasting interest rates in euroland to rise again up to 1.25% or even higher but so are UK rates forecast to rise from a lower base. If Spain gets into trouble as some forecast then the euro will probably weaken so its your call when to convert. But one thing is for sure current exchange rates favour those converting euros into £s.

sabretoothtigger

Its hard to predict currency and the UK might raise rates next month too.

So far as I know UK has stronger trade ties with USA then Europe which means we are more likely to stay at low rates as USA appears it will do for this year

I keep a graph of Euro to Sterling but a simple take on it would be to consider the failure of Sterling in 2008 when it was nearly at parity.
In that regard we are over 50% in favour of the Euro


Next target above would be 0.9 euros to a pound. Euro is far more popular even with its troubles, probably because they are bigger

Collie_Collie

Thanks,
Mike, especially liked your last sentence! :T
That's the sort of plain speaking I can cope with about this topic.
I fully understand every change is possible but I just needed clarification if this time was pretty good or bad. As basic as that I'm afraid!

Thanks too Sabretoothtigger, it's comforting for me to see all the replies more or less agree (I think!).
Like Mike you clearly understand this topic very well indeed.

CC