GBP v EURO.

Hi, i hope i don't sound to dumb, but i am confused by the exchange rate, GBP v EURO.  How do you compare if things are still good value for money?  Last year you could get approx 130 / 150 euros to the £, now its about the same amount £ for EURO. So if you were looking at renting an apartment last year for 400 euros, that was quite cheap, now that 400 euros is about £400, is it still quite cheap? I hope someone knows what i mean, its not easy to make myself clear. Thanks.

Well, obviously it is going to be more expensive for you than it was last year because you are paying in pounds.  Much the same as if you visited the good ol' USA.  Last year, a ticket to Disneyworld at $70 would have been about £38 for you.  This year it will be £50 but the price is exactly the same.  Just the old pound in the doldrums, yet again.  However, for an American, they are still paying the same $70 they payed last year.

The same with your holiday let.  If you are British and paid €400 last year that was about £285.  This year it is more like £400 so not such good value for you.  The irish, Germans, French (as well as the Spanish) will still be paying the same amount in their currency that they did last year but, for you, it appears to have gong up £115 even though it hasn't.

I'm afraid that this is inescapable wherever you go.  Last year the Egyptian pound was 12 to the UK 1.  This year it is 7 to the pound so your drink last year at 20 egyptian pounds cost you £1.60 ish.  This year it will cost you £2.85 BUT the actual cost of the drink hasn't gone up.

Until the pound regains some of its value, you would need to look outside the euro and dollar zones to get what you think is good value.  The Turkish lira, the South African rand, the Croatian kuna and the Norwegian krone have all fared as badly as the UK pound so they may be the places to get a cheapo holiday.  The Australian dollar hasn't fared that well, either, but the flight cost may be a bit prohibitive to get a value holiday out of it.

Gbp has lost approx 30pct against the Euro in the last year. Doesn't matter to anyone earning in Euros as boboal  says, no currency risk.

It will be a lean Summer this year on the Costas, unless GBP picks up very quickly.

over the past few months, most people i know here in the UK, were openly talking of ways they were cutting back.  Not changing their car, no chinese/indian take away every fri & sat, not buying everyone a round of drinks, less regular false tans & nails etc ( only examples here & from my knowledge ONLY)...  during the past week seems like those same people have started spending again.  In general I am getting the feel that people are confident but being carefull not 'carefree' with their money.   I know many people affected by the GBP v Euro including myself who live here in the UK... increase in Spanish mortgage interest rates at the year end then the exchange rate has hit hard as we all know.. 

Speaking for myself here...  I have managed to restructure my finances to make savings in the UK in a lot of areas, this  compensates 'almost' for the extra funds having to be transferred to my Spanish bank, which would otherwise have been unsustainable

in addition to the above, I would like to point out that I am however, fully reiliant on the income from my business which hopefully will continue as before.  by the way, we are lucky enough to have had the busiest january in 10yrs trading... my debt collecting skills have been upgraded - i simply cant afford for anyone to take 2 - 3 months to pay me anymore. thats if they dont go bust in the meantime as a few have!

With the Euro in 'yo-yo' land, one way to make a 'quick buck' is to keep your eye on the rate fluctuation. 

Have the cash (sterling) ready - and when the Euro rises against the £ - pounce. 

I kept tabs on the market and got 1.10euros to the £ in December, and made 30 euros, from the differential of when it was equal £/euro ratio, on a £500 exchange.

If you have the cash (not much good in the bank right now) I suggest that, for example, if you pounce with £3,000 @ a euro rate of 1.10 you will get a return of 3,300 euros.  Making a 300 euro profit (from that of the present £1/1euro rate)

Ok, you will then be stuck with a wad of euros - but you can't have it all ways at the moment.

I recently cashed an ISA (that made £176 on £3,000) over a year term.  I'm waiting to make 300 euros with the same sum (£3000) - when the euro goes back up to 1.10 (tourist rate).  It will do, sooner or later. Patience is the key.

This subject has been well covered on another thread on this forum.

One of the main problems brought about by the near collapse of sterling is the impact it has on those of us who live out here permanently but rely on Sterling Pension funds.

Back in August my pensions were worth about 1700 Euros, now they are down to 1300 or less.

We have just had our electricity bill in from Sevillana-Endesa and it is a big OUCH!

540Euros for two months supply based on actual meter readings.

(I would point out at this point we are all-electric apart from a gas hob for cooking and we live well inland so we don’t get the benefit of the coastal temperatures seen on the Costas and for various reasons the house is 'active' 24/7.)

Now, had the sterling/euro rate not declined so badly, 540 would have been manageable, but with sterling so poor and showing no signs of any immediate or foreseeable improvement, its one hell of a chunk out of one months income. It is not helped by the fact that a couple of months ago, Endesa, like most electricity suppliers, increased their charges to domestic users by almost 15%.

Budgeting is difficult; shopping effectively costs 30% more than just three or four months ago, so if an August budgeting left a 30% margin for eventualities, this is now a zero margin, with nothing left at the end of the month.

Still wouldn’t go back to England though! There is another thread running on the forum that mentions ‘…before England goes to the Dogs’…I think that time is well past…it started with Thatcher and gradually worsened to the point where the Dogs are damned and the Fat Cats are running (and ruining) everything.

Quick, Acky, it's 1.10.  Get in there and make your killing.

you know .....keeping an eye on everything can become quite draining.. interest rates, exchange rates oil prices etc...

i was a lot less stressed when i wasnt interested and less clued up!    er ... not that I am clued up just aware

does anyone else identify with where I am coming from? 

Absolutely right. Whats the point in worrying when you can't do anything about it. Let the Politicians get on with it and carry on running the country into the ground. What can you do.......!

was offered 1.09.50 monday, but didn't accept. still await 1.10

I got 1.1119 with 4X currency ex on monday and it has dropped more than a cent since then

Hi Scampi.  Was there a charge by 4X to exchange, and if so, how much?

I have used exchange companies b4 and been charged £25 for a transaction. 

Absolutely no charge from 4X except the £25.00 for Chaps payment made by my bank to send funds to 4X. All banks make this charge so you cannot avoid it. However, the 4X rate was the best available from any company at that time - I checked at least 5 others! Incidentally the money is now in my Spanish bank account earning about 3.5 % interest - cf .75% in the UK! In the current climate moving chunks in tis way makes more sense than regular transfers as you can pick the best dealer rates and with 4X you can set up a deal and wait for the best rate before you submit the deal and seal your rate. I needed the funds as I am buying a Spanish car but now have enough to live on for about 18 months if necessary before I need to make another transfer. Obviously it is worhtwhile to monitor the exchange rates. I am hopeful we might get to €1.25 by April but I suspect that will be the peak.

Hopefully now with the European data coming out, and proving to be bad, this will add a bit to sterling. The next 3 months should prove interesting.

There was some talk prior to xmas that the Eurobor rate would drop in the new year making sterling more attractive thus improving the pound to euro exchange rate. I have not seen anymore on this, has any body else?

scampi

Have you tried Global Currency Exchange.   When we were sending money over every month we had no charges,  I transfered the £ from our bank to their account, they sent the money to our spanish acccount.  No charges at our spanish account.

They are part of HSBC.

annjoe

I have used them. You still have to pay the chaps payment  of £25 [I am with First direct] from the English bank to the currency company. GCEN are very good but their rates are  lower than 4X - eg I changed 25000 this week for 1.119 at 4X whereas GCEN were quoting 1.1020. On large sums these differences are worth considering. However, I would also use GCEN again as they are also pretty efficient.

Oanda

I have not used this service myself, but have heard very good things about it.

The rates I have seen whilst experimenting are virtually Interbank. The $25 charge should more than pay for itself with the good rate you receive. Give them your details of the receiving bank and it all goes automatically.

Try them all, and get quotes. GCEN, Currencies Direct etc. I would guess that they will all be fighting for business at the moment. Try asking for 0 costs if you will use them regularly.

Xe.com give you market rates and a fee of £13 for the transfer. Takes about 5 days from initiating to funds being deposited.

Barclays are now offering a free funds transfer to their customers now to Europe (not sure if it is Barclays to Barclays accounts or Barclays to all banks).

Mark