Discussion
I'm sure it's been done to death, and I haven't searched, but what's the consensus for GBP:EUR over the next year?
I have a sizeable sum in Euro with which I can either buy GBP now, buy GBP gradually over the next year, or leave alone. I don't have a tax issue, and I don't want to go via any other currencies. Ultimately, a year form now, it'll need to be in GBP though, so when will I make my best gain?
TIA
I have a sizeable sum in Euro with which I can either buy GBP now, buy GBP gradually over the next year, or leave alone. I don't have a tax issue, and I don't want to go via any other currencies. Ultimately, a year form now, it'll need to be in GBP though, so when will I make my best gain?
TIA
Personally I would do it now (this coming from someone who has traded full time for 10+ years) If you were doing the other way, selling GBP buying EUR I would wait.
It might work against you a bit but the rate is very low at the moment having been 1.45 three years ago. Sure, it could go to parity but with the way the EU is now it would surprise me. I certainly see the risk the other way, i.e might see 1.30. Could always change half now if you are not sure.....
It might work against you a bit but the rate is very low at the moment having been 1.45 three years ago. Sure, it could go to parity but with the way the EU is now it would surprise me. I certainly see the risk the other way, i.e might see 1.30. Could always change half now if you are not sure.....
marky1 said:
Personally I would do it now (this coming from someone who has traded full time for 10+ years) If you were doing the other way, selling GBP buying EUR I would wait.
It might work against you a bit but the rate is very low at the moment having been 1.45 three years ago. Sure, it could go to parity but with the way the EU is now it would surprise me. I certainly see the risk the other way, i.e might see 1.30. Could always change half now if you are not sure.....
That's interesting. Another point of view I had (from a forex trader) was that Euro is on the way down, and the end of this year will see 1.04 or lower. Mind you, he also quoted me 1.10 on a £250k forward contract last week, while another broker offered me 1.13 on the same day. That's why I thought I'd come to the font of wisdom for a second opinion (or multiples thereof It might work against you a bit but the rate is very low at the moment having been 1.45 three years ago. Sure, it could go to parity but with the way the EU is now it would surprise me. I certainly see the risk the other way, i.e might see 1.30. Could always change half now if you are not sure.....
)I know I'm goingt o commit one way or the other in the next three weeks or so, but the thought of making a move and then watching the rate run in the wrong direction is a chilling (and costly) one.
I have a couple of brokers I play off plus our bank is now wanting to talk competitive rates.
My issue this week was how to price a two year contract and where might we go. We settled on 1.30 in the end - we can always refuse to supply further down the line if it works too much the wrong way (balanced with future raw material prices - up 25% in recent months alone).
The banker guy looked to an internal report which expects mid 1.20's - but then went to an 'experts' panel report which varied from 1.06 to 1.32.
If we could work it out we would all be rich - but it seems wrong at the minute. Having said that there is so much up in the air - and how we think it should turn is not always how the market takes it. Crazy - but I'd be tempted to wait for a while.
My issue this week was how to price a two year contract and where might we go. We settled on 1.30 in the end - we can always refuse to supply further down the line if it works too much the wrong way (balanced with future raw material prices - up 25% in recent months alone).
The banker guy looked to an internal report which expects mid 1.20's - but then went to an 'experts' panel report which varied from 1.06 to 1.32.
If we could work it out we would all be rich - but it seems wrong at the minute. Having said that there is so much up in the air - and how we think it should turn is not always how the market takes it. Crazy - but I'd be tempted to wait for a while.
Doofus said:
That's interesting. Another point of view I had (from a forex trader) was that Euro is on the way down, and the end of this year will see 1.04 or lower. Mind you, he also quoted me 1.10 on a £250k forward contract last week, while another broker offered me 1.13 on the same day. That's why I thought I'd come to the font of wisdom for a second opinion (or multiples thereof )
I know I'm goingt o commit one way or the other in the next three weeks or so, but the thought of making a move and then watching the rate run in the wrong direction is a chilling (and costly) one.
If he thinks the Euro is on the way down then he has his figures the wrong way around. Don't really understand what he is telling you, is he saying the Euro is on the way down, i.e weakening (in which case GBPEUR will be heading 1.20 direction) or is he saying GBPEUR is on the way down?)I know I'm goingt o commit one way or the other in the next three weeks or so, but the thought of making a move and then watching the rate run in the wrong direction is a chilling (and costly) one.
ClassicMercs said:
I have a couple of brokers I play off plus our bank is now wanting to talk competitive rates.
My issue this week was how to price a two year contract and where might we go. We settled on 1.30 in the end - we can always refuse to supply further down the line if it works too much the wrong way (balanced with future raw material prices - up 25% in recent months alone).
The banker guy looked to an internal report which expects mid 1.20's - but then went to an 'experts' panel report which varied from 1.06 to 1.32.
You've absolutely had him over there. The 2 year forward price is 1.135.My issue this week was how to price a two year contract and where might we go. We settled on 1.30 in the end - we can always refuse to supply further down the line if it works too much the wrong way (balanced with future raw material prices - up 25% in recent months alone).
The banker guy looked to an internal report which expects mid 1.20's - but then went to an 'experts' panel report which varied from 1.06 to 1.32.
You can call up your commercial bank today, and lock that price in, and so not be exposed to currency fluctuations.
On the question Of "how to price" currency forwards, it's dependent on the two interest rates, and independent of people's opinion of where it is likely to go.
marky1 said:
If he thinks the Euro is on the way down then he has his figures the wrong way around. Don't really understand what he is telling you, is he saying the Euro is on the way down, i.e weakening (in which case GBPEUR will be heading 1.20 direction) or is he saying GBPEUR is on the way down?
Yeah, sorry, that's me 
I'm used to working Euro - Sterling, rather than, as in this case, the other way around. He thinks the pound will weaken (ie, head towards parity), and on that basis, I'd be better off waiting.Gassing Station | Finance | Top of Page | What's New | My Stuff