american dollars

northernstar007

cheers guys for the help, ive decided not to go down that route, stuck to a savings account

Hoenir

Majority of currency trading is to hedge / offset other currency exposure to manage risk. Tossing coins isn't a sound business model. 

cwep2

As someone who used to trade FX (for a large bank) for a living, it is incredibly hard to make money, but there's a couple of caveats.

If you know you are going to spend foreign currency, eg on holiday, at some point in the near future, buying some when the rate has moved several % to make it cheaper in a short period of time isn't a bad idea. Of course there's a chance you'll be even better if you wait, but particularly watching it within the month before you travel can save you 1-2% - FX rates tend to move sideways a lot (not much net movement) but with swings within a few percent wide range. The key thing here also is that if it goes 'wrong' you are spending the money soon anyway you won't be sitting having to reverse the trade at a 5-10% loss.

Savings rates for FX balances are much less competitive, so although you can get an OK rate with T212 at the moment, there's fewer providers and I would say you are missing out on 0.25-0.5% vs the central bank rate.

Have you thought about the tax implications (CGT, foreign interest)?

Finally I can remember several threads when Liz Truss was PM and the Gbp/Usd rate went down below 1.10 where people wanted to put their money into USD, and it's now 1.29 and if they did so they would be over 15% worse off.

Albermarle

cwep2 said:

As someone who used to trade FX (for a large bank) for a living, it is incredibly hard to make money, but there's a couple of caveats.

If you know you are going to spend foreign currency, eg on holiday, at some point in the near future, buying some when the rate has moved several % to make it cheaper in a short period of time isn't a bad idea. Of course there's a chance you'll be even better if you wait, but particularly watching it within the month before you travel can save you 1-2% - FX rates tend to move sideways a lot (not much net movement) but with swings within a few percent wide range. The key thing here also is that if it goes 'wrong' you are spending the money soon anyway you won't be sitting having to reverse the trade at a 5-10% loss.

Savings rates for FX balances are much less competitive, so although you can get an OK rate with T212 at the moment, there's fewer providers and I would say you are missing out on 0.25-0.5% vs the central bank rate.

Have you thought about the tax implications (CGT, foreign interest)?

Finally I can remember several threads when Liz Truss was PM and the Gbp/Usd rate went down below 1.10 where people wanted to put their money into USD, and it's now 1.29 and if they did so they would be over 15% worse off.

The media ( as usual) were overblowing the situation with sensationalist headlines about the Pound going to parity with the Dollar.
The low Pound meant that popular investments like index trackers, went up in value for UK investors.
A few people on here ( including me making the right decision for once) then moved into hedged index trackers whilst the Pound was unrealistically low.
Probably the one and only time I have ever indirectly played the currency markets !

Cus

CliveOfIndia said:

Bostonerimus1 said:

northernstar007 said:

is it worth buying $$$'s right now, keeping them under the mattress

Currency speculation is a mugs game

For an individual member of Joe Public it certainly is.

The big banks put a lot of time and effort into it, and make or lose huge sums of money every day in doing so.  Obviously they've got teams of dedicated experts doing the trading, and they hope that overall they make more than they lose.  But it's still a fairly high-risk punt, even when you've got experienced professional traders who know what they're doing.

For ordinary people like us I agree, it's really not something to get involved with, certainly not with money you can't afford to lose.

I think banks would more likely take risk based orders from corporations who need to hedge their risk for true purposes like cargo etc, and make money out of the tiny spread and intel. I don't know how much of the FX market is truly a function of this or just speculation