When to exchange euros?

VeryMan

hello! when would be the best time to exchange a large euro amount into pounds? thanks!

NotRichAtAll

when your happy with the exchange rate

DCFC79

How large we talking ?

What's the rate like now and are you happy with the rate now?

VeryMan

We are talking about 250k euros. The main factor would be Brexit I suppose. So I don't want to exchange now and the sterling to fall further just before the referendum or even more after Brexit.

Super_Whiskey

That's the risk you take. I can't see the Euro getting any better before the referendum.

Depending on how you're exchanging it, some places might give you a better rate for such a large figure.

If you're not in a rush, you could set a range you're happy with and exchange them when it hits that.

evangelos

As long as the polls show increased chance of brexit, which they continue to do so, the pound will continue falling.

If this goes on till the referendum and brexit does happen the pound will fall even more...

So in the above scenario you change after brexit.

If polls however shift and brexit is less probable, the pound will gain. So you need to follow the polls to get the turning point.

What happens in the scenario where the polls show ~50/50 of brexit till the referendum?
In that case its a coin toss. If you want to gamble wait for the official referendum results and see how next day goes. You may win a lot or lose a lot. If you are not a gambler, a more "safe" strategy would be to change half of your your money before and half after the referendum. This way you are dividing your risk by two.

grumbler

The current rate already reflects all expectations.
You can be lucky to beat is, but like with any gambling, you equally can lose.
The only what is 100% certain, is that you can't beat it by getting advice from some internet forum.
Period.

evangelos

grumbler wrote: »

The current rate already reflects all expectations.

I fail to see the validity of this point.

Before referendum shenanigans: pound/euro 1.44
Today with 50% chance of brexit: 1.2489

Of course 20 cents fall cannot be solely attributed to the Brexit event but we can all agree it is the main driving factor.

The current rate reflects the 50% probability of the brexit event and not the event itself.
If the event becomes a certainty then pound will lose some more (arguably as much as it has lost up to now, but certainly lose) . If staying in EU becomes a certainty the pound will revert back to its previous levels.

The only safe algorithm to "predict" the movement is to follow the probability of Brexit, as it is reflected in the polls. I wouldn't call that gambling. As i mentioned in my post gambling would be to 1) wait for the results of the referendum while the polls show 50/50 split in the people and 2) change ALL the money the day after. The market does not work like that, thus the current 20 cent drop in the exchange rate.

I am in the same position as the OP, and i am waiting a clear sign of where the referendum is going in order to make my decision. This 50/50 situation is very unnerving.

TheTracker

VeryMan wrote: »

hello! when would be the best time to exchange a large euro amount into pounds? thanks!

Around 1030am, to avoid the pre-work people and lunchtimes. Wednesday is quietest.

grumbler

evangelos wrote: »

I fail to see the validity of this point.

Really?

If the expectation is that the pound, most likely, will grow, 'optimists' are buying pounds and the rate drops to balance the the demand from 'optimists'.

If the prevailing expectation is that the pound, most likely, will lose value, 'pessimists' are selling pounds and the rate rises to balance the supply from 'pessimists'.

Expectations (proportion of optimists/pessimists) keep changing, and so does the rate.

And it's mainly professionals that are byuing/selling, not amateurs like you who wants to beat them after getting some advice from other amateurs.

The only safe algorithm to "predict" the movement is to follow the probability of Brexit, as it is reflected in the polls.

So, are you the only one following this algorithm? Not to mention that there are far too many uncertain factors in it.

I wouldn't call that gambling.

It is gambling. 100%. And as for any gambling you can hedge the risk (limit potential gain/loss) by buying financial derivatives, but this will cost you.

I am in the same position as the OP, and i am waiting a clear sign of where the referendum is going in order to make my decision. This 50/50 situation is very unnerving.

Good luck.
If it's 50/50 ATM and you are waiting for, say, 60/40, you will make loss if it goes in other direction to, say, 40/60.
I play this game too with some other currency, but I clearly understand that this is gambling.

evangelos

I found the daily analysis on this site very helpful. It's real value is putting dates on key report publications/releases for macro-economic data and daily explanation on the why the currency pair moved up or down.

pound sterling forecast dot com (not affiliated in any way)

I am posting under the impression that this is a forum for financially savvy people who want to get better at financial issues. I really don't understand the benefit of statements like "amateurs like you", "its a gamble" in essence "leave it to the professionals",

If someone is aiming to detect whether the pound is going to increase/decrease 1 cents in a day, i agree he must be very well informed and devote his time professionally gathering information and creating complex risk assessment algorithms etc (calling a person like that who has studied mathematics/statistical analysis/risk analysis etc a gambler is a very nihilistic view of things).

But the Brexit event is a political earthquake and falls in the macro-economics field. It's easier for us common people to understand the general tendency of things and move accordingly.

And the aim of the OP and me is not to beat anyone to the punch. I don't want to predict the absolute low value of the pound and buy at that specific moment, I just want to decide if in the long run its going to continue going down from its current level.

Smart people should make logical and informed decisions. Uninformed and emotional decisions is what gamblers do.

I would really like to hear a constructive view from someone who may think that an increased probability of Brexit is not going to cause further losses for the pound and why?.