International transfer (help me avoid Brexit £ screw-up)
Discussion
Hello All,
I'm based in Sweden and I intend to buy a house here this year. I have a reasonable lump sum that will form the majority of the deposit, however this is currently deposited in my bank in the UK. Every time Terresa May opens her mouth the value of this amount of money drops against the Swedish crown. Now I'm sure there will be some good news for the UK at some point but when is a little unpredictable.
So, I'm pondering a couple of strategies...
1. Move it all now and get it into some Swedish account where I may earn a little interest on it and have some peace of mind that I'm not going to lose anymore.
2. Try day trading it and moving smaller tranches over picking up on the points when some good news comes out.
3. Move 50% now and 50% after the negotiations start as some form of hedge?
Any other ideas or thoughts would be welcome.
I'm based in Sweden and I intend to buy a house here this year. I have a reasonable lump sum that will form the majority of the deposit, however this is currently deposited in my bank in the UK. Every time Terresa May opens her mouth the value of this amount of money drops against the Swedish crown. Now I'm sure there will be some good news for the UK at some point but when is a little unpredictable.
So, I'm pondering a couple of strategies...
1. Move it all now and get it into some Swedish account where I may earn a little interest on it and have some peace of mind that I'm not going to lose anymore.
2. Try day trading it and moving smaller tranches over picking up on the points when some good news comes out.
3. Move 50% now and 50% after the negotiations start as some form of hedge?
Any other ideas or thoughts would be welcome.
I'd move it all now, hard to see the GBP getting significantly stronger any time soon, but still remains a large element of downside risk.
In any case in practical terms, the most important thing is that you have enough SKR so just transfer it into a SWE bank account now, have your pile of SKR and purchase the property you want when ready. I wouldn't speculate with 'living' money which is essentially what you are talking about. Though I suppose buying a house is fairly speculative in itself once price becomes detached from a normal multiple of rental yield, though not sure if that's the case over there.
In any case in practical terms, the most important thing is that you have enough SKR so just transfer it into a SWE bank account now, have your pile of SKR and purchase the property you want when ready. I wouldn't speculate with 'living' money which is essentially what you are talking about. Though I suppose buying a house is fairly speculative in itself once price becomes detached from a normal multiple of rental yield, though not sure if that's the case over there.
Pick your expected date for house purchase. Divide total by number of months. Split that amount and change over every month.
Essentially once negotiations start there will be good and bad news and sentiment will swing around and no one can tell you which was that is gong to go. With UK deficit to EU hitting a record high today there will be some motivated negotiators on the EU side, so GBP could easily strengthen as rapidly as it has fallen.
So splitting the total will give you a blended average.
As for day trading it WTF?
Essentially once negotiations start there will be good and bad news and sentiment will swing around and no one can tell you which was that is gong to go. With UK deficit to EU hitting a record high today there will be some motivated negotiators on the EU side, so GBP could easily strengthen as rapidly as it has fallen.
So splitting the total will give you a blended average.
As for day trading it WTF?
Thanks chaps!
My current thoughts are to just say b
ks and move it across straight away. Then I can at least not stress about it, also as I'm renting in Sweden at the moment I can kill that overhead more quickly by being able to move quickly on a potential house price and then also, I will know what I have to work with it in terms of a deposit. I suspect it wishful thinking the £ will recover anytime this year in any great rally unless we get news of a really soft Brexit.
My current thoughts are to just say b
ks and move it across straight away. Then I can at least not stress about it, also as I'm renting in Sweden at the moment I can kill that overhead more quickly by being able to move quickly on a potential house price and then also, I will know what I have to work with it in terms of a deposit. I suspect it wishful thinking the £ will recover anytime this year in any great rally unless we get news of a really soft Brexit. Just my opinion but this is how I view FX expenditure.
If you have a GUARANTEED BILL (such as a house purchase) in a foreign currency and NOW - TODAY - AT THIS MOMENT - you have enough money to pay for it if you exchanged it from GBP into the currency of the bill then...
EXCHANGE IT RIGHT NOW!!!!
Here's why.
The amount of the bill won't change. That is a fixed number of SEK.
The fact you are sitting on a large number of GBPs is purely coincidence, it could be USD, EUR, NZD or whatever.
What you DO NOT have is a large number of SEKs to cover that bill.
A bill you KNOW YOU HAVE TO PAY.
So what you are doing in effect is placing a MASSIVE gamble that the GBP will get stronger vs. the SEK.
The instant you decided to buy a house in Sweden you were gambling.
It makes absolutely NO SENSE to me that the two issues (FX gambling and house purchase) should be interlinked.
There is absolutely NO CONNECTION between the two.
If you were buying in the UK and the estate agent said... "oh also while you consider buying this house, how about putting on a HUGE FX bet in say USD vs GBP or EUR vs GBP..." you would kick them in the clunge and shut the door in their face.
Your decision to buy in Sweden doesn't make you some sort of FX genius that should be gambling huge sums.
(As evidenced by the sums you have already lost, sorry!)
If you have a GUARANTEED BILL (such as a house purchase) in a foreign currency and NOW - TODAY - AT THIS MOMENT - you have enough money to pay for it if you exchanged it from GBP into the currency of the bill then...
EXCHANGE IT RIGHT NOW!!!!
Here's why.
The amount of the bill won't change. That is a fixed number of SEK.
The fact you are sitting on a large number of GBPs is purely coincidence, it could be USD, EUR, NZD or whatever.
What you DO NOT have is a large number of SEKs to cover that bill.
A bill you KNOW YOU HAVE TO PAY.
So what you are doing in effect is placing a MASSIVE gamble that the GBP will get stronger vs. the SEK.
The instant you decided to buy a house in Sweden you were gambling.
It makes absolutely NO SENSE to me that the two issues (FX gambling and house purchase) should be interlinked.
There is absolutely NO CONNECTION between the two.
If you were buying in the UK and the estate agent said... "oh also while you consider buying this house, how about putting on a HUGE FX bet in say USD vs GBP or EUR vs GBP..." you would kick them in the clunge and shut the door in their face.
Your decision to buy in Sweden doesn't make you some sort of FX genius that should be gambling huge sums.
(As evidenced by the sums you have already lost, sorry!)
walm said:
Your decision to buy in Sweden doesn't make you some sort of FX genius that should be gambling huge sums.
(As evidenced by the sums you have already lost, sorry!)
I agree with most of what you said, the only thing is the last part. I have not lost any large sums yet as I only came into the money today (inheritance) so have had zero control on proceedings until today! Now I'm actively looking at the best chance of getting the most money to Sweden, as I said in my post above, I'm now sort of convinced the £ is fooked for the next year or so unless some miraculous Brexit deal is done which I simply do not want to risk my chances on buying a property on. So in the absence of any other ideas, I think it is a direct transfer this week or next as soon as I can lock in a favourable/ acceptable exchange rate. (As evidenced by the sums you have already lost, sorry!)
davepoth said:
Move it as soon as you possibly can. The pound might recover but my personal opinion is that we'll see south of 1.10 to the $ before the year is out.
It's the GBP to SEK that is important, not USD. So his decision (if he will gamble on FOREX stuff should be based on that.walm said:
Just my opinion but this is how I view FX expenditure.
If you have a GUARANTEED BILL (such as a house purchase) in a foreign currency and NOW - TODAY - AT THIS MOMENT - you have enough money to pay for it if you exchanged it from GBP into the currency of the bill then...
EXCHANGE IT RIGHT NOW!!!!
Here's why.
The amount of the bill won't change. That is a fixed number of SEK.
The fact you are sitting on a large number of GBPs is purely coincidence, it could be USD, EUR, NZD or whatever.
What you DO NOT have is a large number of SEKs to cover that bill.
A bill you KNOW YOU HAVE TO PAY.
So what you are doing in effect is placing a MASSIVE gamble that the GBP will get stronger vs. the SEK.
The instant you decided to buy a house in Sweden you were gambling.
It makes absolutely NO SENSE to me that the two issues (FX gambling and house purchase) should be interlinked.
There is absolutely NO CONNECTION between the two.
If you were buying in the UK and the estate agent said... "oh also while you consider buying this house, how about putting on a HUGE FX bet in say USD vs GBP or EUR vs GBP..." you would kick them in the clunge and shut the door in their face.
Your decision to buy in Sweden doesn't make you some sort of FX genius that should be gambling huge sums.
(As evidenced by the sums you have already lost, sorry!)
I think this is a very sound piece of advice.If you have a GUARANTEED BILL (such as a house purchase) in a foreign currency and NOW - TODAY - AT THIS MOMENT - you have enough money to pay for it if you exchanged it from GBP into the currency of the bill then...
EXCHANGE IT RIGHT NOW!!!!
Here's why.
The amount of the bill won't change. That is a fixed number of SEK.
The fact you are sitting on a large number of GBPs is purely coincidence, it could be USD, EUR, NZD or whatever.
What you DO NOT have is a large number of SEKs to cover that bill.
A bill you KNOW YOU HAVE TO PAY.
So what you are doing in effect is placing a MASSIVE gamble that the GBP will get stronger vs. the SEK.
The instant you decided to buy a house in Sweden you were gambling.
It makes absolutely NO SENSE to me that the two issues (FX gambling and house purchase) should be interlinked.
There is absolutely NO CONNECTION between the two.
If you were buying in the UK and the estate agent said... "oh also while you consider buying this house, how about putting on a HUGE FX bet in say USD vs GBP or EUR vs GBP..." you would kick them in the clunge and shut the door in their face.
Your decision to buy in Sweden doesn't make you some sort of FX genius that should be gambling huge sums.
(As evidenced by the sums you have already lost, sorry!)
You have to deal with the world as it is, rather than how you would like it to be.
R11ysf said:
Pick your expected date for house purchase. Divide total by number of months. Split that amount and change over every month.
Essentially once negotiations start there will be good and bad news and sentiment will swing around and no one can tell you which was that is gong to go. With UK deficit to EU hitting a record high today there will be some motivated negotiators on the EU side, so GBP could easily strengthen as rapidly as it has fallen.
So splitting the total will give you a blended average.
As for day trading it WTF?
If you have any element of a risk taking appetite I would do this. You get the average over say 12 months. Essentially once negotiations start there will be good and bad news and sentiment will swing around and no one can tell you which was that is gong to go. With UK deficit to EU hitting a record high today there will be some motivated negotiators on the EU side, so GBP could easily strengthen as rapidly as it has fallen.
So splitting the total will give you a blended average.
As for day trading it WTF?
Oceanic said:
FFS our Prime Minister opened her gob again at the weekend and the £ is tanking again, now not sure what to do!
Why did you wait the extra days? I think it was known last week she'd have a speech on Tuesday and from everything she has said before it was likely to push the pound lower...Not sure what is is now, but I think most are predicting it to probably go lower in the shorter term considering all the noise coming out at the moment.
NRS said:
Why did you wait the extra days? I think it was known last week she'd have a speech on Tuesday and from everything she has said before it was likely to push the pound lower...
Not sure what is is now, but I think most are predicting it to probably go lower in the shorter term considering all the noise coming out at the moment.
I had to wait for the funds to clear, that was close of play on Friday so I wasn't able to do anything until this morning at the earliest. Might have to wait a day or so to see if it recovers a little, otherwise I'll just take the hit. Not sure what is is now, but I think most are predicting it to probably go lower in the shorter term considering all the noise coming out at the moment.
As we move towards A50 being triggered, I think that you should anticipate anything above €1:10 - £1 being a good rate, so perhaps you are ahead of the curve.
In your position, I would be far more concerned that I was buying the right property, in the right location at the right local price than what today's exchange rate change might be.
In reality they are quite small percentages, compared to transaction costs if you happen to be buying the wrong property, in the wrong location at the wrong price.
In your position, I would be far more concerned that I was buying the right property, in the right location at the right local price than what today's exchange rate change might be.
In reality they are quite small percentages, compared to transaction costs if you happen to be buying the wrong property, in the wrong location at the wrong price.
I decided to move the money yesterday, having spoken to quite a few people the overall view is that the downside risks where a lot higher for me in the timeframe I was thinking of, so the money is moved. This also means I am now in a position to move a lot quicker on the right property here should something come up.
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