exchange rate

[debbyLL]

just checked m&s and they are quoting 1.597 does anyone know due to political reasons whether it is going to go higher or drop i know it went up to 1.62 in the summer i.e june /july but wonder whether as someone told my husband that it always go lower during the summer hols

 

[Kell-Bell]

I hope it does!!!

It has been slowly creeping up, so maybe it will go up a little more. I've got my fingers crossed!

Not much help I know but just thought I'd put my thoughts down.

Kell-bell

 

[kazzie]

I can't buy my $$ for about 2 weeks I hope the rate can stay up there for a while longer!

 

[amf]

A good guide to how the tourist rate is going to fare tomorrow is look at the changes in the market rate today (page 200 on Ceefax). The tourist rate will generally reflect the previous days movement in the market rate.

This only allows short term planning admittedly, but if you were going in the near future and saw the market rate drop a couple of cents one day, you might still have time to order your tourist $ at the pre drop rate.

 

[Beejayjay]

The single biggest influence on currency rates are Interest rates.

The next expected move in UK rates is upwards, and that will increase the £'s value against the other major currencies, giving you more $'s for your £'s.

The higher the interest rate you can get in a country, the more investors want to place money in that country. That means they have to convert their local currency into the currency of the country they wish to place their money in, increasing demand for that currency and making it more valuable and so more expensive to buy.

The markets already know that the likely next move in UK rates is up, that's why the £'s value has been creeping up lately (aided by the generally reasonable economic conditions here compared to those of most other major economies).

Unfortunately, I dont know if the expected rise in rates is going to come prior to your trip, I would actually expect not. However, I also dont think you're going to see a downward move to worry about, things will likely stay pretty much status quo for the next few weeks. And if rates do go up before you buy, it'll be a nice bonus !

Hope this helps.

 

[debbyLL]

thanks for that last post i think i now understand, no wonder we were getting 2.4 in the eighties. now do i want a higher mortgage or better exchange rate

 

[vernon]

BeeJayjay is quite right in his economics explanation of one of the main reasons currencies move, however in this situation the next expected move in US rates is also up, so it does rather cancel out the UK rates expected rise. The $ vs £ rate now tends to follow the $ vs Euro rate, as the Euro gets stronger or weaker £ tends to follow that movement to a smaller degree. IMHO whatever happens to the Euro is where £ will go ( to a lesser degree). For good order the next expected move for the euro interest rates is up as well.

IMHO a much more important reason at the moment is the "political" dislike of the US ( and it's $) over it's actions in Iraq and the expected cost of that excursion. There is also a reading that the American ecomony will expand and that that will help Europe to export to America. I'm not sure I agree with that as
1) Americans may choose not to buy French and German goods for political reasons and
2) with a 25% decrease in the value of the dollar those European imports are going to cost an extra 20-25%.
3) If America's demand for goods increases it's likely to be more beneficial to America itself than Europe ( although the biggest gains will be for China and the Asian "tiger" economies)

For those reasons I think the $ is a good buy at the moment, my only concern over that stratagy is that the American Government could decide to really "screw" the Europeans by weakening the dollar further making any export led recovery in Europe almost impossible. If Europe ( read Chirac) "plays ball" over the rebuilding of Iraq and contributes to the cost (financially and politically) of that rebuilding I doubt the Americans will be that spiteful and may decide to "bury the hatchet" , but I wouldn't put it past the current US government if they don't get their way to find a way to "get even" as they would see it and "bury the hatchet" in the middle of Chirac's ( and Europe's economic) back.

 

[Beejayjay]

Vernon,

Not to denegrate the validity of your very well made points here, but I think you've gone a little deeper than the average ''due to visit Disney so looking for a good exchange rate to finance all those 'just one more little thing' purchases'' DIS'er will be needing to ponder on this !

And I have to ask, do you really think George Dubya 'Nucular' Bush and his good old boy advisors have the, erm, cerebral assets to plot such a fiendish revenge on Johhny Frenchman and his Lederhosen wearing German brother ?

I seriously doubt it...

 

[mike230652]

Beejayjay

So how do you know what the " average DIS'er " needs to know ?

Sounds a little patronising ! LOL !

I think Vernon's post was well put ( IMHO ) and informative.

If you're not careful Beejayjay, someone will patronise you and tell you that your post sounds xenophobic in parts and could do with a spell-checker .......

mike ( in a light hearted vein )

 

[Beejayjay]

Sigh...

Mike,

Did you consider, in your rush to correct me, that my post was made in a similarly light-hearted vein ? Being an average DIS'er myself and all...

I actually said I thought Vernon's points were valid and well made. Missed that too huh ?

And I was patronising enough to put in my time to try to help the original poster with their problem, not just post a criticism of someone elses post.

If I post some wrong information, a correction is warranted and of course I'd be happy to find out where I'd been misinformed myself, but please, dont try to correct my opinions. Thats what's patronising.

I assume the spell-check reference is due to my deliberate mis-spelling of the word Nuclear ? Ever heard the guy try to say it ? I guess you really did miss my light hearted intent. Zoooooom...

Dont you just love the righteousness of the PC police ? Dont try to impose your standards on me please, I dont need the help.

Anyway, to all my other fellow average DIS members, my humble and heartfelt apologies if this semi-literate, part Irish, part Portugese, part French, all Jewish, cockney Limey has offended any of my American, French or German brethren in any way with his xenophobia, while trying to interject a little humour into a fairly dry subject. That was not my intent, though I'd guess you all figured that out... well, nearly all of you.

Brett (in a light hearted vein).

PS : Vernon, I went to the college in Orpington, nice place. Whats the name of the pub oppposite the station ? I spent far too many hours in there during free study time ! Either there or on the snooker tables in the Walnuts leisure centre.

Hmmm, I think I know now why I failed some of my exams...

 

[kazzie]

Thanks to both posters who posted their knowledge on here.

BJJ is fairly new here and could be 'put off' for being critisized for what I can see didn't merit it and the 'rebuttal' veiled as lighthearted was way OTT!

I didn't find his post patronising or Xenophobic and although Vernon is V. knowledgable about this subject, myself who I consider the average bear,it just went over my head

 

[debbyLL]

thanks for all replies i found all very useful, its creeping up slowly
i don't know whats more exciting watching the rates or countdown for hols!!!

 

[vernon]

Brett, sorry if you thought I was being critical, that wasn't the intention, just trying to fill in some of the blanks.

In answer to the "does Bush have the grey matter to hatch the plot". I think they do and I think they will (if crossed). They didn't baulk at committing thousands of troops and billions of dollars into teaching those "A rabs" (" marks put there to emphasise that is how I view the American governments view of those people not my own thoughts) a lesson. I don't think they'd worry "blowing" a couple of billion $$ to manipulate the exchange rate to seriously disadvantage the Euro block. It wouldn't be a hard thing to do, cut interest rates again ( or just get the cental bank to hint it was going to do so) and sell a few billion $$s in exchange for Euros. Combined effect would push up the value of the Euro sufficiently to make a difference to the import/export markets.

The Maxwell is the pub you're asking about. It's been revamped recently, still a toilet though. Think the snooker tables (and bar area) have been replaced by an all singing all dancing gym now, although they may have been moved to a back room somewhere).

 

[vernon]

deleted for double post

 

[Fantasia Sam]

Ok so cutting to the chase people -

Is it a good idea to buy some $$$ now before Crimbo ?

 

[Beejayjay]

Vernon,

No, in no way was I trying to suggest you had offended me or criticised me unfairly. If it came over that way, my apologies, that was all aimed at Mike.

I really was just trying to prevent this turning into some kind of politico-economic debate when all the original question effectively asked was whether anyone could clue DebbyLL in as to whether or not now would be a good time to get her $ !! I thought a jokey comment might achieve that, but I guess you need a sense of humour in the first place to grasp that.

In fact your post pointed out an omission I made in my own which would have backed up what I said about rates staying basically as they are now, ie. the likelihood of US rates going up as well. Thanks, as I said, I am more than happy to admit an error/have a misconception of mine corrected !

And if my reply to Mike seemed a little OTT, well, I apologise to everyone for that, it was a somewhat heavy-handed attempt to reinforce the point that my original comment to Vernon was meant to be a joke.

As you may have noticed, I do get really irritated by people trying to hoist their standards on me. I'm an adult, I can draw my own conclusions, have my own opinions and speak for myself thank you.

Enough of that though.

Wow, the Maxwell was the place indeed Vernon ! I hadn't thought about it in years... As I recall it wasn't the nicest pub in the world back then when I was at the college, back in '83-'85 (gawd, is it really that long ago ??), but it was convenient and cheap, important to us layabout students !!

And that's a shame if the snooker table has gone, their is always room in the world for the loafers to 'exercise' their skills as well as the hard-bodies !!

I always admire those people who have a 6-pack - mine is more like a party 8 !!

 

[Beejayjay]

Fantasia Sam,

My personal opinion is that you should wait a while before buying your bucks if you are not travelling till around Chrimbo.

Vernon is right that both UK and US rated are due to go up, which would largely cancel out any advantage/disadvantage or sizable move in either rate as a result of one rate being raised before the other.

However, I think it more likely that our rates will go up before the US rate, in which case you'd be better waiting and buying your greenbacks then, before the US hikes it's rates.

I think out rates will move first as there is again concern over house price inflation hitting the headline inflation rate - higher interest rates means higher mortgages, meaning less people will buy houses so house prices will moderate somewhat.

There are also signs that UK manufacturing output/demand is on the up, which can also have an adverse effect on inflation, and that is a big concern to governments in this day and age.

The UK's rates are expected to move upward before the new year, though of course there is no guarantee of that. If they do go up before those of the US, you could benefit to the tune of 2 or 3 cents per pound converted.

The US economy is not as healthy as our own, which makes me think the Federal Reserve will want to hold off on a rate rise as long as possible to encourage growth. Thats why I think it likelier that our rates will rise first.

What do you think Vernon ??

However, I would advise anyone not to get too caught up in the exchange rate game: a one cent rise in the exchange rate only gives you one extra dollar for every £ 100 exchanged. Is it really worth worrying much about ?

Hope this helps !

 

[vernon]

The US economy is not as healthy as our own

Not sure I'd agree with that, initial viewing may lead you (one) to think that but much of our domestic demand has been fueled by consumer spending aided and abetted by give away interest rates and loan companies and banks falling over themselves to give us money. In the near future I see that spending getting squeezed by higher cost of repayment, higher taxes (as Gordon Brown's sums have been a little off for a couple of years) and cut backs in Government spending. Our only hope of a continued "boom" is if we can export our way out of trouble, Europe's got worse problems than either the US or ourselves and America's "recovery" may take a little more time than we expect to come to fruit and may pass us by if a high exchange rate pushes up the cost of our exports.

I'd agree 100% in not getting too carried away in trying to second guess the "markets" . As I've , clumsily, tried to illustrate there are so many variables that can effect the short term (next 6 months) fluctuation that it's pointless trying to 2nd guess yourself. If you have the cash, it's not too far until you go (lost interest can eat up any exchange rate profit) and you see a rate you like you may as well change at least some up. But unless you're looking at 4-5 grand the difference isn't worth beating yourself up over .

 

[peewakio]

Personally, I made the mistake of listening to fellow boardsters a couple of weeks ago when the rate was meant to be in decline. I was advised to buy my travellers cheques at what I perceived to be a decent rate $1. 523 at the time. At todays rate of $1.60 and rising I am now $231 out of pocket (nobody to blame but myself) not much you may say out of 4 and a half grand but it's a big hole in the golf clubs I want for myself. Not to worry I'll be buying some more next week (watch the rate plummet)

 

[mike230652]

Beejayjay

Whoa..............steady on mate, it WAS meant to be light-hearted, honest. If it came over as a bit ( !? ) heavy handed accept my apologies.

The use of my " LOL " bits should have explained it........only excuse I can offer is maybe too many Buds last night made my attempt at humour a bit heavy.

So again, apologies to you Beejayjay.........No harm or offence meant, OK ? I certainly wasn't trying to foist my standards on anyone, and as for Political Correctness ...that's very nearly an insult to me !?! ( JOKE, honest ! )


mike