I’m planning a UK trip in September. When do people reckon would be a good time to change money? Now or later?
Thanks for any ideas.
Here is the two year trend. The pound fell sharply from 68NT to 47NT, and since then it has recovered a little. But in the last few days it has fallen back again.
I would guess the overall trend is back up, but hard to say in 2 month time frame. Why not hedge your bets and change half now, and half then? Whichever way a trip to the UK is much cheaper than a year ago. 
Great, thanks. Changing half now and half later makes sense. Interesting that things may be picking up again, a bit sooner than people thought.
Guess is the operative word. What would you base it upon? Why wouldn’t it stay where it is, decline further, or go up and down all over the place like a yo-yo? Technical analysis is pure speculation. Look at from September to Octomber of 2008 on that chart. By mid-September, you’d probably have thought it was returning to its previous glory, and you would have believed this to be the case by the end of the month and bought in because you’d have figured it still had 10NT to rise before it got back to its historic average. Eight months later (now), you’d still be missing the shirt off your back.
joesax: Even if it did trend generally upwards, it could have a really unexpected and bad dip for one or more days and then rebound and you could still get caught out. Trying to time the market is pure chance.
Very, very hard to guess at the moment. We had to convert enough money to buy a fairly small property 2 or 3 weeks ago. We ended up settling for about 50.5nt to the pound (we converted several sums over a few days to hedge our bets, but 50.5nt was about the average overall). We were kind of hoping it would go down to about 48, but ran out of time. Now I’m glad we were forced to convert when we did.
Recent economic news out of the UK would’ve made you think the pound was going to dip further, yet it manages to strengthen. It’s a funny world.
Precisely. As Graham (I believe it was Graham, but it may have been Buffett) said about the stock market (and I believe it applies to any type of investment): in the short term, it’s a voting machine. In the long term, it’s a weighing machine.
Just a “guess” as you say, based on the fact that the pound is below its recent historical levels against the NT.
For example: if the pound rises to 2 dollars for a pound, given its historical levels against the dollar is it not a reasonable guess to assume that it will not rise much further, and would be more likely to fall in the future.
The pound is now very low against the Euro, it nearly hit 1:1 a few months ago, now it as at 1.14. Is it not reasonable to guess that it will likely rise from this level. Of course it cannot be predicted with certainty, but I would suggest there is at least an above 50:50 chance.
The pound is surrounded by the Euro…now it is very competitive with the eurozone and there is only 15% VAT rate being applied. I don’t think the pound has anywhere to go but up, if it goes down it just adds loading to the government and people in terms of importing energy and goods.
Pound’s on the way up. Unless there is a major world blip, can’t see that changing.
Again, see my points about you don’t really know which way it will go. The historical average might only be an indication. Look at what happened from September to November of last year. Would anyone have guessed that? Over the long term, you’re probably right that it will tend back towards the historical mean, but we’re not talking about the long term here.
Although it is unlikely to happen within months there are confirmed reports of Brown’s cabinet discussing potentially switching to the Euro. This is likely to meet strong resistance, but could at least spark fears for the currency.
The pound began gaining as did other major currencies as the U.S.D. began to fall, but the last few days of trading has seen the U.S.D. rise again and break the hedging trend of the past few weeks in gold, silver and stocks. This is unlikely to continue for long, but how long is difficult to say. For every eight stocks dropping tonight in the U.S. there is only one rising. Are we about to see another repeat of the last quarter of last year? I don’t think so, well at least not quite yet, but the stock markets have rallied too far and there is bound to be some correction. Inflation should hit again in a few weeks time and the long term picture of the U.K. is still very bleak at best so I don’t see the pound being a strong long term investment, but that’s not to say the pound could rally. The pound generally has been rallying only because of the week U.S.D. though, so keep an eye on that.
That’s my take.
Thanks for all the ideas.
What I get from this is that it probably makes sense to buy at least some sterling now. Or at least as much sense as anything else does. So that’s what I’ll do.
[quote=“GuyInTaiwan”]
Again, see my points about you don’t really know which way it will go. The historical average might only be an indication. Look at what happened from September to November of last year. Would anyone have guessed that? Over the long term, you’re probably right that it will tend back towards the historical mean, but we’re not talking about the long term here.[/quote]
I have no idea what your point is. Of course I do not know which way it will go, if I did I would be a rich man. I am making an informed guess-as I said.
An informed guess? Surely that’s oxymoronic. My point is that you haven’t even attempted to lay out a really tight argument for why the Pound should rise (other than to make reference to a past that may or may not be relevant at all to what’s happening now or what will happen in the future).
The questions should be, “compared to what”? Compared to a couple years ago when the UK was purchasing most of Spain and Southern France, the pound is quite low…ergo all those fixed income retirees moving back. Compared to 1 month ago when I purchased something and had it shipped from the UK, it is about 7-8% higher.
I am unable to come even close to predicting currencies except for certain things like the CNY, which is essentially still a one-way bet.
Most currencies have been highly volatile recently. The forward rates have been all over the place, especially the Euro.
In general try to keep an operating hedge that balances the currencies you usually spend in (simplly by allocating some of your savings and remitting over time - poor man’s dollar averaging).
Okay let’s say an informed best guess. :loco:
I never claimed to have a really tight argument. I said it was a guess, and advised the OP to “hedge his bets” when he changes money.
So what is your point, or are you just trolling?
Mawvellous: I’m not trolling. I laid out my point several times in several previous posts. I like the way that you make a guess, yet I lay out an argument by looking at previous data for why looking at previous data is problematic, and you consider me to be trolling. Fantastic.
I am not allowed to make a guess, when I clearly stated it as such? I italicized the word guess in my initial post to emphasize the point! You even admit I am “probably right” over the long term, and in the short term I clearly stated it was “hard to say” how the exchange rate would go.
So your point was?
To not take your guesses as any kind of financial advice.
So … how should the OP choose whether/when to change NT to sterling?