Any clever finance peeps out there?

[Head_in_the_clouds]

We are going to Orlando in June and I was wondering whether I should get my money exchanged now or put what I've saved into my ISA and get interest on it then change it nearer to the time.

I'm a student so I've only managed to save £500 spending money so far but I'm trying to do the best I can to maximise my money. If you get what I'm saying - If over the next week the exchange rate goes up to $1.50 should I change say £200 now (or the whole amount) or should I put the whole amount into my ISA, work out the interest over four months on the £500, and then change the £500 + interest in June?

I know it is guesswork but if it was you, what would you do? My Dad says if it goes up to $1.53 ish, I should just change it. Oh and if it helps, I'm transferring my ISA to Northern Rock so will be getting 3.25% AER on it. Current rate is about 1%, before Christmas I was making £35 ish pounds per month on my savings - now £20 and dropping grrrrrr . Hehe wish I could go back in time and change it to when it was $2. Saved up £750 spending money last year and panicked after I changed it that I would never be able to spend it all! Needless to say, I managed it ! I treated my parents to coffees at Starbucks most days and took them to the Grand Floridian for afternoon teas and I'd like to be able to do similar again this year - if not better .

 

[Head_in_the_clouds]

Bumpitty Bump Bump !

 

[tiggers friend]

I'm not a forex expert, but one site I reference suggests that the exchange rate will go up to 1.50 - 1.55. To support this view have a look at this site http://www.forecasts.org/pound.htm

We're travelling in April and I plan to hold off for a while. The difficulty is with the uncertain economic climate that should some unforeseen issue come "out of the woodwork" the rate could go down.

Hope this helps.

 

[Head_in_the_clouds]

Thanks Tigger's Friend. You know, I'm Tigger's friend too, he's a popular guy ! I think I might change it if/when it goes up to 1.55, the interest doesn't work out at much more.

 

[HeresYourEars]

I don't trust any of those forecast sites. No one knows, and everyone can guess. You're taking a chance either way.

 

[Shooby doo]

First of all I think your ISA thinking is flawed,if your rate is 3.25AER that is only £16.25 over the whole year & depending on how your intrest is worked out that money may have to sit for the whole year to get it? That's how the banks "hook" us by offering a good rate on money that we must let "lie" to get it.
I don't think that anyone can predict the market at the minute,there are too many variables - The Obama factor for one (from our point of view I think it would have been better if the "other guy" had won!),the US economy is in a worse state than ours but if some of his early policies look good then the market changes. The "Brown" factor,we are getting close to a General Election (probably 2010) so he/govt are just not going to tell us how bad it really is -unlike the Aussie PM who did & well done to him!- but everytime something turns up in the press/media it is going to affect the markets.
How does this help you? Well I would set my rate - $1.50- $1.55 & bite their hands off if it gets there.Each full 10 cents is worth approx $50 to you BUT don't forget that if that's the exchange rate then the market rate will need to be in the region of $1.60-$1.65. The "spread" is normally around 10c difference although at the moment it is slightly less but should the market improve I would expect this to go back to normal.
HTH SD

 

[Lizzybear]

I don't trust any of those forecast sites. No one knows, and everyone can guess. You're taking a chance either way.

I agree, forecast.org was actually wrong in their forecast recently (when the pound nosedived from being at around $2 to the £1 for a while) so i'm inclined to think it's a true gamble at the moment!

 

[Head_in_the_clouds]

Thanks for the advice everyone! Shooby, you are right about the £16.25 ISA interest over a year on £500 but I have more than £500 in my ISA lol. Its my fault for not explaining it but I meant four months of interest on my ENTIRE ISA not just the £500. However, I have just found out my course fees for next year are going to be £6000 . So I need all the interest I can get! I'm just going to keep an eye on the exchange rate instead. EVERY DAY!!!

 

[poppie123]

I'm just going to keep an eye on the exchange rate instead. EVERY DAY!!!

That is exactly what i am doing, if and when it hits $1.50/$1.55 i'm buying.

 

[Shooby doo]

Well things are looking up at the minute!Rate is up over 1.49,I'm kicking myself as we bought our DVC last week at 1.41!!!! Student fees
SD

 

[london75]

Have fun or rather, torture yourself here as you watch it climb and fall with depressing randomness.

Seems to be climbing and I think we'll have 1.50 (trade rate rather than tourist) today, hurrah.

http://finance.yahoo.com/q/bc?s=GBPUSD=X&t=5d&l=on&z=m&q=l&c=