Exchange Rate £££ - $$$
Discussion
I need to transfer a hunk of ££ into $$, anyone got any thoughts on what the Dollar is going to do?
I can get $1.86 to the £1.00 at the moment from the bank, which seems good...
Anyone got an opinion? insider info
nudge nudge? should I grab it now or hold fire?
Advice gratefully received...
I can get $1.86 to the £1.00 at the moment from the bank, which seems good...
Anyone got an opinion? insider info
nudge nudge? should I grab it now or hold fire? Advice gratefully received...
b17nns said:
I've been told that we can expect to see $2 to the £ within the first 6 months of this year.
agreed.
2.30 apparently being the meltdown point that I've read an economist pointing at (what do they know anyway)
So,with the dollar being reasonable,I cant resist this badboy from stateside;
http://cgi.ebay.co.uk/ws/eBayISAPI.dll?ViewItem&category=2384&item=3780030577&rd=1&ssPageName=WD2V
Scoobz said:
I need to transfer a hunk of ££ into $$, anyone got any thoughts on what the Dollar is going to do?
I can get $1.86 to the £1.00 at the moment from the bank, which seems good...
Anyone got an opinion? insider info
Advice gratefully received...
Quite how you can get 'insider info' on currency fluctuations, I'll never know. It can't be possible, can it?
Looking at the overspending of the US Government (at a record high), my feeling is that the dollar will weaken further before it gets stronger. Having said that, haven't the US just increased their interest rates a tad?
nickster said:
I've been told that we can expect to see $2 to the £ within the first 6 months of this year.
agreed.
2.30 apparently being the meltdown point that I've read an economist pointing at (what do they know anyway)
So,with the dollar being reasonable,I cant resist this badboy from stateside;
http://cgi.ebay.co.uk/ws/eBayISAPI.dll?ViewItem&category=2384&item=3780030577&rd=1&ssPageName=WD2V
Please dont buy it... or if you do dont buy an amp!!!!
Iceman82 said:
The Federal Reserve just raised interest rates to 2.5%. That will probably adjust the strength of the dollar. Though I am not exactly sure which way!! 
>> Edited by Iceman82 on Thursday 3rd February 16:18
Sure, the fed raised rates to 2.50% last night,,,if you look at the fed funds futures at the cbot you can see the market has similar hikes price in for both the march and may meetings. None of this is a suprise to the markets and the lack of recent price fluctuation reflects this.
With respect to cable (gbp/usd) rate, the big problem for the $ is the ever increasing budget deficit. Recently both Warren Buffet & Bill Gates, recognised as probably the 2 richest men in the world and American, both maintain a short $ perspective...as in they see the value of the $ continuing to fall. I would be suprised to see much improvement in the budget deficit in during Pres Bush's final term.
As for actual exchange rates, it depends on your time frame....there is of course a chance that the rate goes to 2.00 over the next few months, but you could have had the same conversation back in sept 04.....the 2.00 is so well advertised it is unlikely to happen when you expect.
Trading in the markets, when you get calls from mates saying...tell me when usd/gbp gets to 2.00....or when this stock gets to such a level,,,I am going to invest my savings...by the time the man on the street is involved the trade has either gone or never materialises!
Depends on the ammount you have to change, but I would be inclined to do say 1/2 above 1.90 to say 1.92......if you think it is going to 2.00 (like everyone else) then hold out. It really is going to take an event to get to 2.00 any time soon, which is why it is 1.88 today.
Another consideration is an Fx forwards contract, you can pay a premium at a bank, to lock in an exchange rate. for example you wouldn't get any worse than 1.85 and then ride your luck waiting for the magic 2.00 to arrive
clubsport said:
Another consideration is an Fx forwards contract, you can pay a premium at a bank, to lock in an exchange rate. for example you wouldn't get any worse than 1.85 and then ride your luck waiting for the magic 2.00 to arrive
That's an option contract. A forward is an outright sale/purchase at today's spot plus or minus the interest differential to the maturity date.
At present a six-month forward would be 1.88 less (very roughly) 0.9% of 1.88 so approx 1.86. If you think spot will be better than that in six months, don't do it.
srebbe64 said:
Quite how you can get 'insider info' on currency fluctuations, I'll never know. It can't be possible, can it?
OK... worded another way... Scoobz should have typed:
I know nothing about dollars and punds, anyone know if the exchange rate will get better for the pound or worse?
But thanks for all your thoughts people.
As long as the Japanese, Chinese and Koreans keep buying $ to stop their currencies appreciating, the $ will be artificially supported. They are the main reason that it hasn't tanked even more severely yet. But the yank industries are getting more and more peeved with the low-exchange-rate-induced trade imbalances with the asian countries and it will all end in tears.
Anyway, it all kind of kind of depends when you need your $ - personally, if I was not in a hurry and it was a large sum of money, I'd wait until later in the year and start snaffling greenbacks at around 1.95 (before the psychological 2.00 mark). This is just an opinion of course, and no-one can tell what the hell will happen next - terrorist attack on London, middle east countries oil trading in euros, US agitating Iran and oil prices exploding, etc. Gloom and bloody doom.
Anyway, it all kind of kind of depends when you need your $ - personally, if I was not in a hurry and it was a large sum of money, I'd wait until later in the year and start snaffling greenbacks at around 1.95 (before the psychological 2.00 mark). This is just an opinion of course, and no-one can tell what the hell will happen next - terrorist attack on London, middle east countries oil trading in euros, US agitating Iran and oil prices exploding, etc. Gloom and bloody doom.
The longterm structural thing that undermines the dollar is the balance of payments deficit. America sucks in imports (which creates a surplus of dollars in the currency market) and sells US Governemnt debt to the rest of the world (which creates a demand for dollars in the currency markets) which are held by central bansk as foreign exchange reserves and as investments. If that balance gets out of wack, then you can expect the strength of the dollar to go up or down accordingly.
It appears, according to the rumours in the market, that an awful lot of central banks in asia/pacific are beginning to shift their foreign currency reserves into Euros. This reduces the demand for dollars and helps make the US balance of payment deficit harder to fund. Net result is that the dollar falls.
Now these central banks don't want to provoke a dollar collapse (a) because they still own lots of dollars and (b) because it would
the world economy. So rather than just trying to sell dollars hand over fist, they wait till the dollar is showing some signs of strength and use that as an opportunity to sell some dollars.
If you believe this, and I'd say it is fairly plausible, then whenever the dollar starts to look a bit stronger, some big sellers are going to come into the market and push it back down. That would make me feel fairly comfortable if I was holding sterling.
It appears, according to the rumours in the market, that an awful lot of central banks in asia/pacific are beginning to shift their foreign currency reserves into Euros. This reduces the demand for dollars and helps make the US balance of payment deficit harder to fund. Net result is that the dollar falls.
Now these central banks don't want to provoke a dollar collapse (a) because they still own lots of dollars and (b) because it would
the world economy. So rather than just trying to sell dollars hand over fist, they wait till the dollar is showing some signs of strength and use that as an opportunity to sell some dollars. If you believe this, and I'd say it is fairly plausible, then whenever the dollar starts to look a bit stronger, some big sellers are going to come into the market and push it back down. That would make me feel fairly comfortable if I was holding sterling.
ScOoBz said:
No real cut off date 2SB, I have just moved here and I am living off my Credit Cards...
I was going to move some now then a bigger chunk summer time - depending what goes on...
I need to buy a car here though sharpish...
I see. Good luck! So you will inevitably be spreading your bets then!
tone said:
Another consideration is an Fx forwards contract, you can pay a premium at a bank, to lock in an exchange rate. for example you wouldn't get any worse than 1.85 and then ride your luck waiting for the magic 2.00 to arrive
That's an option contract. A forward is an outright sale/purchase at today's spot plus or minus the interest differential to the maturity date.
At present a six-month forward would be 1.88 less (very roughly) 0.9% of 1.88 so approx 1.86. If you think spot will be better than that in six months, don't do it.
You are right Tone, I was explaining things in laymans terms. From my experience to lock in a rate it is cheaper to go with a forward rate than buying an option, with the ammounts involved here.
Nat West seem to offer suprisingly good points to the man in the street.
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff