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I've been living in the UK for the last 3 years and have just moved back to my home country of Germany. During my time in the UK I accumulated some money in a savings account.

With the Brexit referendum upcoming I decided to hedge my bets and convert 50% of those savings to Euros before the referendum. Since then the value of the remaining 50% I still hold in GBP has shrunk significantly compared to the Euro, from around 1:1.30 before the referendum to the current rate of 1:1.12.

Given that:

  1. I don't need the money in the short term
  2. I don't intend to live in the UK again
  3. The money is not earning any interest in the UK savings account
  4. The future is uncertain, but the GBP might drop a lot more

How should I decide when/if to exchange the remaining GBP into Euros? What's the best course of action?

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One way of looking at this (just expanding on my comment on Dheer's answer):

If the funds were in EUR in Germany already and not in the UK, would you be choosing to move them to the UK (or a GBP denominated bank account) and engage in currency speculation, betting that the pound will improve?

If you would... great, that's effectively exactly what you're doing: leave the money in GBP and hope the gamble pays off.

But if you wouldn't do that, well you probably shouldn't be leaving the funds in GBP just because they originated there; bring them back to Germany and do whatever you'd do with them there.

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    This is exactly the thought experiment I was hoping for. I'd never transfer money to GBP in the current political situation if all my savings were in EUR already. Thanks! – AndreasWeller Oct 26 '16 at 9:27
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I don't intend to live in the UK again

If you don't intend to live in the UK again, my advise would be to move this back to Germany in EUR in the near future. Generally taking Fx [Currency] risk is not advisable unless the portfolio is large.

I don't need the money in the short term

As you don't need the money immediately, you can afford to wait and watch a bit. Whether the rate will be more favourable or worse can't be predicated with certainty. So you can wait for few weeks / months and pick up a week when it is slightly favourable and convert them into EUR.

  • Agree with the first point. Not so much the second, but I have a relative in the US who was in a similar situation when the pound was ~1.30 USD and who chose to "wait for the rate to improve"; suspect they'd jump at the chance to get 1.30 now. Basically, if you think betting on the direction of GBP is a worthwhile investment for you, leave it in GBP and admit that you're deliberately engaging in currency speculation. If you don't consider that to be a suitable investment for you, get it into your German assets and put it to work doing something else. – timday Oct 25 '16 at 16:05
  • @timday What I meant was certain days due to some news, there is panic and rates take beating. It takes few days to reflect the correct rate. I think OP can wade through such and wait. But you are absolutely right, I am not asking to time the exact market or predict which way it would go. – Dheer Oct 25 '16 at 16:47
  • Ah OK I know what you mean; yes sometimes it just feels like one of those days/weeks when everything's gone nuts about something and it's better to just sit it out until things have calmed down. – timday Oct 26 '16 at 12:47

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