Foreign currency buying advice re June 8th election

hybernia

Just a quickie . . . Has anyone here had cause for second thoughts about the advice that if you're flying off on holiday after the UK general election, best thing is to buy half your foreign currency now and the other half after June 8th.

We're off on June 15th, so I was going to buy half the Euros we need today or tomorrow.

Alan_Bowen

I think the real answer is no one knows. The polls are going all over the place, the last two big polls in the US and here in the EU Referendum resulted in completely unexpected results, so frankly your guess is as good as anyone else's. Buying half now will at least ensure your losses are only half as bad as they could be, but equally you may lose half your gain if you had waited. Caution seems to be the best answer but I am not a currency speculator and Warren Buffett isn't a member of this forum!

EssexExile

I'd be absolutely amazed if anything much changed after the election. I'm not a currency speculator either.

worried_jim

EssexExile wrote: »

I'd be absolutely amazed if anything much changed after the election. I'm not a currency speculator either.

Well since the £ is losing value now after Labour narrowed the gap to the lead I would confidently expect the currancy to tank further if they win, however you will see a Sterling bounce back on Friday 9th if the Conservatives stay in power.

I fly on June 17th and will buy all my currency then once the £ has recovered and possibly made a gain.

PeacefulWaters

Why not do as you normally do currency wise and stick £20 on a Labour win as a contingency against that causing a drop in the value of Sterling.

hybernia

Thanks everyone for the comments. As will be obvious, I'm no currency speculator, either. . . but it turns out, hubby is. How amazing is that?

Only now do I realise that last year, he bought far too many Euros (on May 6th, 2016), the unspent notes which we brought back and stuffed in an envelope in a drawer where we keep our passports.

The exchange rate as at that date was, according to the Tesco in-store receipt that's also in the envelope, £1 = Euro 1.234. So he bought 650 Euros for £526.74p. And now, in the envelope, I find 190 Euros, this on a day when the Tesco rate is £1 = Euro 1.1208.

I won't attempt to do the math so have gone along with hubby's claim that he deliberately "bought ahead" because he is secretly an adviser to Warren Buffet. Though I do think Mr Buffet might speculate slightly more to accumulate a bit more.

PS: as an addendum to this, I wonder if anyone could explain how many different versions of the same so-called exchange rates actually do the rounds on one day?

I've been online to check with one of the "Best Exchange Rate" websites, which reports that today's £1 = Euro 1.1256 is the worst in the sterling-Euro 90-day rate history.

It also reports that the Tesco rate is £1 = Euro 1.1208, the figure I quoted above.

However: an hour ago, I happened to be in my neighbourhood Tesco store -- where we buy our holiday foreign currency -- and when I asked if that Euro 1.1208 was definite, the girl on the desk smiled sadly and said: 'Oh no. Nothing like that. The rate is 1.09 to the £.'

She explained that the online "best exchange websites" are reporting what the financial arms of supermarkets and stores like Debenhams, Sainsburys, Tesco, |Marks & Sparks and Asda are offering . . . but that's absolutely not the figure anyone's going to get by just walking in through the shop door.

So-oo . . . Tesco Bank is one thing, hence £1 buys you 1.1208 Euros today. Tesco store is another, hence £1 buys you a miserable 1.090 Euros today.

I'd never realised that.. . nor, I suspect, had my oh-so brilliant buying-forward husband.

hybernia

I also hadn't realised, somehow and somewhere I hit a wrong key and my post has appeared in a size that no-one should need to go to Specsavers to read. :eek:

Sorry about that.

eDicky

Hedging on exchange rates by converting some now and some later is a reasonable plan, but buying cash euros, especially from a place like Tesco, is not.

The mid-market (interbank) rate for euros right now is 1.1464. Today I paid for my lunch in Amsterdam at a provisional exchange rate of 1.1474 by using a suitable card (Starling Bank). An ATM cash withdrawal would be at the same rate.

So, more certain than the chance of avoiding the effects of an unknown exchange rate fluctuation is to get the best exchange rate with the right plastic, Monzo, Metro Bank, etc. If you want to exchange in advance at the interbank rate (weekdays) you can use Revolut, although the MasterCard itself costs a fiver. But that's a lot less than you would lose in Tesco...

worried_jim

I use Monzo and Revolut so get the MasterCard rate, haven't bothered changing money in the UK for years- a mugs game.

hybernia

Oh my. The things I should know. . . but don't. Can't really express my thanks enough then to you two (eDicky, and Worried Jim) because ignorance (mine) is very evidently not bliss, and especially when it comes to buying foreign currency. . .

I've never heard of Revolut or Monzo or, um, Starling. I guess I should've done.

The only commonsense hubby and I may have (emphasise: 'may have') exercised is to get a Halifax Clarity credit card (Mastercard) on the basis that I learned from MSE some time ago that this was a sensible choice for foreign travels -- not that we do much of that, but even so.

To be totally honest, I'm not even sure if Halifax Clarity is the best. We used it for the first time in Spain last year and though I'm pretty sure it was a darn better than using our RBS debit card to get cash at an ATM, and charged us less for credit transactions than our 'ordinary' Mastercard ever did, we certainly incurred charges when using the Clarity card to make ATM cash withdrawals in Spain.

(We actually frequent a backwoods part of Spain where not every restaurant / shop // what-have-you even takes a credit card.)

It's clear I'm never going to become a financial whizzkid. I even approached the idea of getting a Halifax Clarity credit card with some trepidation -- silly, I know, but it's surprising, how matters monetary can be a bit intimidating to novices. Weird.

I've now read up on Revolut on its website, and when I've finished this post am going to get the app for my Android phone. After that, God knows. I'll try and figure out what steps to take.

Meantime . . . really big thanks to you both. And I certainly don't mind paying a fee for the Mastercard because that cost is obviously less than the amount being gouged from unsuspecting users of in-store currency exchanges -- and less, too, than the postage costs which have to be paid if ordering currency to be delivered.

Sorry for starting this thread on one topic and then going O/T.

benjus

Halifax Clarity is a great option - the only caveat being that if you want to avoid interest charges on cash withdrawals you need to pay them off as soon as they appear on the account (but best not to do it before they actually appear).

It's worth having other options as backup, but I'd continue to use the Clarity as your primary option. And don't bother changing any money in the UK before you go.