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I 'have a friend' who is going away traveling towards the end of the year. She has a few thousand Euros which she is going to spend whilst she is away and was asking if she should keep it in Euros or if she should change it into sterling as the pound is getting stronger.

Would it be worth it, or would it cost her more in exchange fees than she is likely to make if the pound continues to strengthen? Where would be the best place for her to exchange it to get the best rates?

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This would effectively be currency speculation, betting that the Pound will be stronger vs. the Euro in November (or whenever) than it is today. This would be a profitable transaction if the exchange fees are less than the swing between the two.

In my (very limited) experience, exchange fees are going to be at least a few percent, and she's going to have to do the exchange twice if she wants to turn current Euros into Pounds and back into Euros later; that's at least a 6% hit.

I'd recommend against this. While it's quite plausible for the two currencies to move more than 6% against each other in that time, it's also quite possible for them to move the other way, causing her a large loss.

The unfortunate thing about large, heavily traded things like GBP/EUR is that you're very unlikely to have some information that the big traders don't. While lots of people think that the pound is going to become stronger, just as many people think that the Euro is going to be stronger. These two camps are constantly bidding against each other, resulting in the 1.15 Pounds/Euro exchange rate as of this writing. The current price and current direction that the line is moving in no way tells you what it's going to do next.

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