Buying Euro's....... Help!!!

brad171080

Hi,

I'm not 100% sure i have posted in the correct section but here goes.

I have bought property abroad in Bulgaria and am paying for the property in Euro's. My second installment is due in May 08. The installment totals 9715 Euro's which at the time the contracts were signed equalled £6700 as the pound was healthy against the Euro @ 1.45. Due to the well publicised weakening of the £ the Euro is at an all time low at 1.32 and the installment now stands at £7332, basically im £600 worse off.

I feel a bit of an idiot because i have had the funds for a while and have set up a broker etc to transfer my sterling, everything was in place and about a month ago i could have got 1.39 Euro to £1. I decided to gamble and have paid the price of bad economic forecasts and the general doom and gloom that surrounds our economy.I know none of us can predict the economic future as we'd all be millionaires but i'd like advice off anyone out there who has any knowledge in this area. I have a few questions in mind....

1. Should i bite the bullet and settle now at 1.32 and a £600 loss?

2. How far in realistic terms could the pound fall, could it go sub 1.20?

3. Is there time for the pound to recover in between now and May i.e. will the anticipated interest rate cuts boost the pound?

I'm getting quite worried and although im not sure if this is possible would advise anyone who is investing abroad to try and deal in £ sterling as at least then you will have a concrete figure that won't fluctuate!

Thoughts please, thanks to all who have taken the time to read this.

Kind Regards

Brad

jon3001

brad171080 wrote: »

1. Should i bite the bullet and settle now at 1.32 and a £600 loss?

IMHO - yes. The risks seem weighted on the downside for sterling.

brad171080 wrote: »

2. How far in realistic terms could the pound fall, could it go sub 1.20?

That's possible by the end of 2008!? I've heard of ppl predicting 1.10-1.20 within the next 2 years. That would bring us to around our level against the Deutsche Mark when Soros broke the pound.

brad171080 wrote: »

3. Is there time for the pound to recover in between now and May i.e. will the anticipated interest rate cuts boost the pound?

Rate cuts will push sterling even lower. Money will simply be worth less.

[Deleted User]

yes definitely settle now. The pound v euro is going to continue the slide

jon3001

jon3001 wrote: »

brad171080 wrote: »

2. How far in realistic terms could the pound fall, could it go sub 1.20?

That's possible by the end of 2008!? I've heard of ppl predicting 1.10-1.20 within the next 2 years. That would bring us to around our level against the Deutsche Mark when Soros broke the pound.

Oops - trading at 1.19320 now. That was quick.

jon3001

jon3001 wrote: »

brad171080 wrote: »

2. How far in realistic terms could the pound fall, could it go sub 1.20?

That's possible by the end of 2008!? I've heard of ppl predicting 1.10-1.20 within the next 2 years. That would bring us to around our level against the Deutsche Mark when Soros broke the pound.

Now trading @ 1.08790. F&*K!

Ukevas

:eek: now at 1.075

and that before fees ETC... on the up side will be loads of room on the Greek / Cyprus beech next summer :rotfl:

newsaver2008

Hi Brad
I recently bought a property in Turkey so I sympathise with you about the sterling situation. In Turkey they like to peg any large purchases (or rent) to the euro or dollar. However, I refused to buy anything where they did that and there was plenty of choice in the local currency (Turkish lira).
I wonder why you chose to pay for the property in instalments in view of the weakness of the £ against the Euro and the fact that it has been weak against the Euro for quite some time now, even before the credit crisis?
I don't know if the £ will rally anytime soon in view of the BoE's apparent plans to cut the interest rate again in January.
Currency goes up and down like shares so maybe if you are paying over a long period of time the pound will rally eventually.

Baldur

newsaver2008 wrote: »

I wonder why you chose to pay for the property in instalments in view of the weakness of the £ against the Euro and the fact that it has been weak against the Euro for quite some time now, even before the credit crisis?

Most Bulgarian off-plan developments require payment by instalments.

tradetime

Afraid I can see no reason for the £ to strengthen against the € in the near to medium term. ECB remains much more hawkish with monetary policy,so unless there is a marked deterioration in the Eurozone economy, the Euro is likely to remain in a range of possibly £0.90 - £0.95. imho

deaglecat

Sorry to disagree.... I believe that the £ to Euros ship has already sailed - what we are currently seeing reminds me of the oil price bubble earlier this summer. Sure there may be a way to go yet but in the longer term I think Sterling will bounce.

FWIW - I bought a fair chunk of Euros about 12months ago... which I will shortly be converting back to £.

If you speculate FX then be aware that you will lose a few % in trading each way.

Don't get caught selling sterling at the bottom !

newsaver2008

Ah..ok...I didn't know the property was off-plan. Mine was re-sale.