MSE News: Should you buy euros now?

thelawnet

BobbinAlong wrote: »

I topped up my Thomas Cook Cash Passport card with euros last week at 1.2 for next month's trip but if it goes up again, I'll add some more - another form of saving that might give a better return than the bank!

You'd do better with the Travelex Cash Passport Globe card....

davehills

Buy Euros if going on holiday, most certainly. You'll get a good deal and one of the cheapest holidays you have ever had.

However, I personally would not buy Euros as an investment, as was being suggested on the radio earlier.

Why? Well, the value of a currency is largely based on confidence. I find it hard to believe that confidence in the Euro will increase much in the forseeable future, especially if the likes of Greece bomb out. More likely it will continue to slide.

IMHO, if that happened it wouldn't take a lot for the currency to collapse altogether, maybe if another country dropped out it could be the trigger?

Proceed with caution if buying purely for investment..

davehills

Porcupine wrote: »

If you're going to Greece, they might end up being in neo-drachma by the summer and then you'd have to consider converting Euro to drachmas. If you did, the drachma would probably devalue compared to the Euro.

If that occured then the Greeks would be HUNGRY for foreign currency, IMHO. Probably not so much the Euro but more stable currencies such as US dollars and possibly UK Sterling.

liamod

Greece will not have the drachma by the summer. They are holding re-elections in June and the EU will do everything they can to keep them in the euro (especially Germany) otherwise they will default on all their debts causing a big downslide in all European economies and the strength of the Euro. Also if Greece were to leave the Euro it would take them at least 4 months to print their new drachma currency so there is no chance that Greece will be using the neo-drachma this summer

Ainsley1

Don't Panick Mr Manwaring!
Bobbin wrote "I topped up my Thomas Cook Cash Passport card with euros last week....". You may well have taken advantage of the high rate but do be aware of the risks too that your cash passport company may fail too (perhaps a very small risk) but then it's Thomas Cook....no banking protection here

Porcupine

davehills wrote: »

If that occured then the Greeks would be HUNGRY for foreign currency, IMHO. Probably not so much the Euro but more stable currencies such as US dollars and possibly UK Sterling.

Perhaps... but the Greek people don't actually have any money! A few wealthy people will have some stashed away, but not enough to affect pound/Euro or dollar/Euro rates. A possible effect would be further devaluation of the neo-drachma as money flights to 'hard' currencies... potentially creating a forex black market (and so different 'official' and 'street' rates), but I can't see how this would affect anyone other than Greece. Zimbabwe's collapse hardly caused pain at the Federal Reserve or the ECB...

scotty1971

i was just wondering even though we are getting a good exchange rate on the euro,will the tourist resorts not just put up their prices to compensate for this,so it really won't be any cheaper than it usually is?

Doshwaster

scotty1971 wrote: »

i was just wondering even though we are getting a good exchange rate on the euro,will the tourist resorts not just put up their prices to compensate for this,so it really won't be any cheaper than it usually is?

I would have thought that with most resorts struggling for customers then putting prices up would be the last thing they would do.

Besides, why would they want to "compensate"? If a meal is €40 then how much it costs you is irrelevant to them - in fact the falling Euro is good for them as it encourages more people to visit and spend more money.

One effect not really discussed however is the likely reduction in the number if Euroland people visiting the UK on holiday. A few years ago London was full of French people shopping. It's not now.

scotty1971

Doshwaster wrote: »

I would have thought that with most resorts struggling for customers then putting prices up would be the last thing they would do.

Besides, why would they want to "compensate"? If a meal is €40 then how much it costs you is irrelevant to them - in fact the falling Euro is good for them as it encourages more people to visit and spend more money.

One effect not really discussed however is the likely reduction in the number if Euroland people visiting the UK on holiday. A few years ago London was full of French people shopping. It's not now.

cheers for that explanation,makes perfect sense

antenna

In my local costa del sol bar a pint of cruzcampo is 1 euro,and in the chinese next door a good 3 couse menu del dia + prawn crackers and a shot of chinese liquer is 4.55 euros.......getting cheaper every day!