Living in UK - How to take advantage of £/€ exchange rate

WilcoYHF

Hi all,

I'm living in the UK at the moment but hoping to get back to Ireland sometime soon. I noticed yesterday that the pound is really strong against the euro and there must be some way for me to take advantage of this. However, I'm really bad when it comes to exchange rates!

Does anyone have any advice for how I could take advantage of these rates?

I get paid in pounds into a UK bank account and I still have my Irish account. I also have an Irish credit card that has a couple of hundred euros owed. (I presume it would be cheaper to pay this off now.

Thanks

coylemj

Regardless of the exchange rate, it's always the right time to pay off credit card debt as the interest rates are outrageously high.

In relation to predicting exchange rates, the usual disclaimers apply - if I knew which way they rates were going to go, I'd be typing this from poolside in my Bahamas villa. The UK is expected to start raising interest rates some time next year and that expectation is currently built in to the sterling/euro exchange rate. It will be a long while after that before the ECB can raise interest rates for the eurozone. Hence the pound sterling is likely to remain strong vs. the Euro for some time to come, especially with the economy in France virtually in recession and German manufacturing hurt by Russian sanctions.

TopTec

Every few months I transfer a wedge from my Uk account into my Irish account. The quickest and safest way I have found is using an online marketplace exchange company. Far better rates than any bank and it cost me 3 euro a transaction.

For example I got 1.273 through Currency Fair 2 days ago and my UK bank was offering 1.227 with a £20 fee. No contest.

TT

NIMAN

Also a user of CurrencyFair here, great gains to be made using it over the banks. They need to offer better value if they aren't to lose out big time in the exchange market.

gucci

A big +1 for currency fair. I have started using it recently, really easy to use and great value to be had on the transaction fees alone, but when you add in what is usually a better exchange rate too it is simply a no brainer!! Even though my tranasctions are few and far between I am raging i did not start using it sooner!

tomfoolery60

Similar to CurrencyFair I'd recommend TransferWise - find it cheaper and the interface/service/speed better again. GBP/EUR is a big market for them and my transfers are usually blisteringly quick!

Re. exchange rates, as said above no one can predict them with any accuracy. And as also said above - pay off that CC if you have spare cash to do so!

hblock21

coylemj wrote: »

The UK is expected to start raising interest rates some time next year and that expectation is currently built in to the sterling/euro exchange rate. It will be a long while after that before the ECB can raise interest rates for the eurozone. Hence the pound sterling is likely to remain strong vs. the Euro for some time to come

I know no one can predict the future but based on the above - is this true?

UK interest rates rise = stronger pound versus the euro

?

TopTec

Its all conjecture really. The flatness of growth in the Euro zone is now beginning to infect the UK forecast on growth. Whilst pay demands are very low at present there is increasing pressure to raise these which could in turn effect inflation.

Uk rates going up will cause problems as there are large parts of the population on interest only mortgages, and have borrowed to the max. so even a small rise could cause real problems.

There are so many variables even the Bank of England won't commit to an increase in interest rates in the near future. Most economists suspect it will be the end of 2015 at the earliest before that is considered.

My personal opinion is that it will remain at the level it is, give or take a couple of cents, for the next few quarters or until the EU economy picks up.

TT

gb1985

if you are considering transferring money online into Irish bank account, do check out transferwise.com

*no connection, just a big fan

coylemj

hblock21 wrote: »

I know no one can predict the future but based on the above - is this true?

UK interest rates rise = stronger pound versus the euro

?

I'm a bit late responding to your question but the answer is 'yes'. When a central bank increases interest rates, there is a movement of capital into that currency to avail of the higher interest rates, hence it strengthens relative to other currencies.

The US economy is growing faster than the UK or the Euro zone, hence they are expected to start increasing interest rates before anyone else in order to put the brake on inflation. That's why the dollar is so strong against sterling and the euro, it's already factored into the exchange rate.