Best Way to Convert my £ savings to Euro and USD (No Deal Hedge)

BentleyBoy181

Hi guys,


I have around £30,000 in savings and predict that the current political uncertainty may lead to further falls in value of the pound (and significant falls if No Deal occurs). As such I wish to hedge against this by putting some into currencies that I feel will be stronger over the short/medium term (i.e. USD and Euros) which I feel will outperform sterling.

Thinking about the best method to do this. I am a Revolut Premium customer and have experience using their app. My proposed approach is to use the Revolut service to
1. Covert my £ to USD (and Euro)

In the future, assuming the £ has falled against these currencies I can convert back to sterling.

I understand that
- Revolut offers one of the best FX rates as it uses inter-bank rates
- There is no transaction cost
- You can switch money instantly at any time using the app


My questions are:

1. Is this an efficient way to do what I want to acheive?
2. Are there any better methods I could consider?
3. Anyone considering a different way of protecting their savings from the impact of Brexit?


Thank you in advance for any responses.


Kind regards,


Bentley Boy

masonic

Unless part of your plan involves a time machine, you might be closing the stable door after the horse has bolted.

My protection against devaluation of the pound was to buy international investments. I started investing in these around 15 years ago.

Mr.Saver

Before you do that with Revolut, read their T&C: https://www.revolut.com/legal/terms

11. Are there any restrictions on using the Revolut app or Revolut Card?

Please act reasonably and responsibly when using the Revolut app or Revolut Card.

For example, the Revolut app or Revolut Card must not be used (directly or indirectly) as follows:
......
to trade in foreign currencies for speculative purposes (that is, to take advantage of any expected rise or fall in the value of a currency) or to take advantage of discrepancies in the foreign exchange market.

BentleyBoy181

Thank you for the quick responses, and I note the T&C. This is very much a one time transaction rather than trading

I take 3/4 holidays per year in the US and Europe.

The advice is in-line with that offered by our newspapers

No-deal Brexit: your financial survival guide (Guardian) which says "If you think the pound will continue to tumble, then buying your holiday money now makes sense, even at today’s depressed levels"

How to protect your finances if it’s a no-deal Brexit on October 31 (Times) which says "Analysts almost all agree that the pound’s value will fall significantly after a no-deal Brexit." and "You could get a pre-paid currency card such as Revolut; put money on the card, pick the currency you want to buy, then “lock in” the exchange rate for months or even years before you travel. You can then use it as a debit card when you’re abroad."

bostonerimus

I would not try to time the currency markets. I’d probably spend a bit more time on holiday in the U.K.

colsten

Seems a bit of a high risk strategy, and totally irresponsible suggestion from the Times, to put any significant amount of money for any significant length of time into a company that doesn't even offer FSCS protection.

Voyager2002

Can you not ask Revolut directly?

I am NOT saying that I think your 'punt' against the pound is a good idea (I think it sensible to keep your savings in a mix of currencies rather than one), but surely they could let you know whether they would block your transaction or impose special fees.


Another poster has raised the issue of FSCS protection. You could benefit from the Italian version of this protection by opening a multi-currency account with Fineco bank: you would then be using a financial service that is designed for what you are doing.

stphnstevey

BentleyBoy181 wrote: »

Thank you for the quick responses, and I note the T&C. This is very much a one time transaction rather than trading

I take 3/4 holidays per year in the US and Europe.

The advice is in-line with that offered by our newspapers

No-deal Brexit: your financial survival guide (Guardian) which says "If you think the pound will continue to tumble, then buying your holiday money now makes sense, even at today’s depressed levels"

How to protect your finances if it’s a no-deal Brexit on October 31 (Times) which says "Analysts almost all agree that the pound’s value will fall significantly after a no-deal Brexit." and "You could get a pre-paid currency card such as Revolut; put money on the card, pick the currency you want to buy, then “lock in” the exchange rate for months or even years before you travel. You can then use it as a debit card when you’re abroad."

You have the wrong end of stick

This is talking about small amounts of holiday money, not £30k investment (unless £30k is holiday money, in which case, convert to US dollars, go to Vegas and enjoy!)

N1ckS

BentleyBoy181 wrote: »

Thank you for the quick responses, and I note the T&C. This is very much a one time transaction rather than trading

I take 3/4 holidays per year in the US and Europe.

The advice is in-line with that offered by our newspapers

No-deal Brexit: your financial survival guide (Guardian) which says "If you think the pound will continue to tumble, then buying your holiday money now makes sense, even at today’s depressed levels"

How to protect your finances if it’s a no-deal Brexit on October 31 (Times) which says "Analysts almost all agree that the pound’s value will fall significantly after a no-deal Brexit." and "You could get a pre-paid currency card such as Revolut; put money on the card, pick the currency you want to buy, then “lock in” the exchange rate for months or even years before you travel. You can then use it as a debit card when you’re abroad."

There's a bit of a difference between hedging a little travel money for an existing holiday and hedging £30,000 of savings.

Anyway, whichever point of view you take on Brexit surely the only way is up for the pound in the long term. No Brexit and there'll be a big welcome bounce and of course if there's a no deal brexit then we can all look forward to the land of milk and honey and bumper trade deals with the Faroe Islands.

atush

I am not 100% convinced Revolute is solid.

So, i put only enough on the card that i will use w/in the next few days/week. But the rates are good so i am hedging the risk if you like.

pinkllama

Why not buy unhedged US Treasury or Euro government bonds?
Short dated ones are not dissimilar to holding cash.