MSE News: Should you buy euros now?

Probably best to buy some now and then the rest will be at the point of purchase (debit / credit card) when you're abroad.

As an aside, I like how the 3 experts completely dodged the answer! However, with the Euro crisis lurching from the sanctity of 'head in sand' to complete panic, it's rather difficult to predict. Though I wuld point out that the long term average of $/£ has tended to be 1.6$/£...

Take a look at the depictions of waterfalls in the charts of european bank shares, especially Spanish and Greek banks then decide whether you want buy euros. There is a very real possibility one may end up with either worthless paper at worst or at best, paper which is worth a lot less IMHO.

Judith_W wrote: »

Is there a trend for the rate to reduce as it gets nearer the summer due to the number of tourists spending abroad, or as I presume this is such a drop in the economic ocean that it has no impact?

I've been watching rates for a few years now, and haven't noticed such fluctuation. Forex rates generally depend on the values of interest and inflation rates in each currency (if inflation is 10% in country A and 20% in country B, country B's currency will get progressively weaker. But if interest rates are 10% in A$ and 30% in B$ then you'd make a profit by being in B, so everyone will buy B$ and it will get stronger, cancelling out that profit), and the relative performance of their economies (or perceptions thereof).

The quandary at the moment for the Euro depends where you're going. If you're going to Germany, their currency (the Euro, maybe minus a few countries) might remain strong and so today's weak Euro means you get a good deal. If you're going to Greece, they might end up being in neo-drachma by the summer and then you'd have to consider converting Euro to drachmas. If you did, the drachma would probably devalue compared to the Euro (this after all is the whole problem) and you'd get a better deal than today (neglecting charges, anyway)... but whether you'd get a better deal compared with converting from pounds to drachma at the last minute, who can say?

But of course, anything that goes up can come down, or go further up indefinitely. And saying things like 'Germany has a strong currency' might be generally true but that's no use in deciding what to do when you fly on the 1st August... the ripples from a Euro breakup could be days or they could be years... nobody knows.

Thanks doshwaster I needed a voice of reason!

I topped up my Thomas Cook Cash Passport card with euros last week at 1.2 for next month's trip but if it goes up again, I'll add some more - another form of saving that might give a better return than the bank!