Exchanging Euros into GBP – Which Exchange Rate to Use?

robben_2

I would like to convert €50,000 into GBP however I’m a little bit confused about the exchange rates.



For example 1 EUR = 0.87009, however I have also been quoted 1.14931. I’m therefore a bit confused which exchange rate to use?


Should the Euro be stronger than the GBP so I get more pounds. Also, if this a good time to exchange my Euros?


Thanks in advance for your help.

benjus

The 0.87009 figure is the value of 1 Euro in Pounds, i.e. €1 = 87p. The 1.14931 figure is the value of 1 Pound in Euros, i.e. £1 = €1.149. They both mean the same thing, just stated differently. One is the reciprocal of the other.

To get a good exchange rate you want the Euro to be strong, i.e. the 1.149 figure should be lower and the 0.87 figure should be higher for you to get more money.

Is now a good time? Compared to what? Around the beginning of July the Euro peaked against the Pound so you would have got more then, but it has dropped back since. There's a lot of speculation that the Euro could crash, but so far it has pretty much held its value against the Pound.

Perhaps more importantly is how to you plan to change the money - you need to find someone offering a low mark-up on the exchange rate, but also minimize the risk of them going bust while holding your money.

robben_2

Many thanks for your quick response, I now understand it.

robben_2

Thanks Ashley for your advice.

calypso_rhapsody

Please do be careful about the risk that Benjus mentioned - that the broker you choose may go bust whilst holding your money. Deposits held by many organisations are not protected. It may seem like a hypothetical risk but there have been some sorry tales not that long ago (if i remember rightly Interchange went out of business - not sure how their customers did in the process).

You might consider it worth taking the lower rate you will get from a big bank in exchange for the security of knowing your money is safe? Like an insurance premium? Last time i changed money (a much much smaller amount) i ended up using HSBC having called a couple that i have accounts with.