Long term £'s to $'s

MrKelevra

Hi Guys,

As a proper newbie to the forums I could really do with some worldly words of wisdom from some of you seasoned pro's.

**Apologies, this may be a little long-winded**

I'm currently engaged to my long term partner and we plan on getting married in April 2018. After which, we've decided that our honeymoon destination is going to be in the USA for around 3 weeks.

Because of the length of time between now and the honeymoon, and because of the shock of the EU referendum, and because the markets will still be volatile having not actually left the EU at that stage meaning that the Pound (£) will likely have suffered against the dollar ($) as a result. I'm going to take advantage of the poor, but still reasonable exchange rate that we currently have and change some £s (likely 1000-2000) for $s now with the hope of effectively saving me a few hundred dollars if the exchange rate drops between now and 2018.

With this in mind, what is the best and most cost effective method of purchasing these dollars bearing in mind the length of time before we leave.

I've been weighing up simply changing cash for dollars vs a pre-paid travel card (though some of these do incur costs for non-use).


Any help on this would be greatly appreciated, and thank you for bearing with me 'til the end of the question

bigadaj

Run the risk and use a credit card (Halifax Clarity)

Who knows what will happen with the exchange rate but the immediate Brexit Shock has occurred, I d expect the pound to slowly strengthen in that time.

Nit withstanding the unpredictability you can mitigate any losses by maximising the sum you have. Taking your mid point then £1500 in a 5% account for two years will generate a bit more than £150, so a 10% increase. In real terms the increase will be lower because if inflation but having cash dollars won't gain any interest and be subject to similar inflation risk.

Therefore the pound could weaken by nearly 10% in two years before you are any worse off not changing now.

peachyprice

I would expect the pound to slowly gain over the next 2 years after the current drop TBH. IMO this is probably the worst time possible to buy currency you don't neeed.

richardw

What's your calculation for saving a 'few hundred dollars'?

martindow

If anyone knew what exchange rates were going to do they would be very rich.

Some people in your situation would hedge their bets by changing some now and the rest later. But no-one can say definitely what is best for two years time.

davemorton

And we have the presidential elections coming up soon, and again, uncertainty will scare the markets, so worth waiting till then.

bigadaj

Run the risk and use a credit card (Halifax Clarity)

davemorton wrote: »

And we have the presidential elections coming up soon, and again, uncertainty will scare the markets, so worth waiting till then.

Why?

If the markets are scared then it will presumably lead to a weaker dollar, but by no means certain.