Exchange Rate

ahward

Mouseketeer
Joined
Jun 4, 2020
Just wondering everyone's thoughts on exchange rates - we are waiting on ROFR and hope to receive something back in next few weeks but not sure what to do in terms of exchanging money. Part of my thinks that we should exchange at the current 1.29 rate but with Brexit and Presidential elections this could all change. The Wife thinks we should wait in the hope it goes back up to 1.3+ , however its a gamble.
 
My daughter ‘did’ Camp America for a few summers a couple of years ago and was paid in cash in dollars. She put the cash in the safe and has gained more by doing nothing, than she would have lost had she exchanged the monies, each year she was paid. I would be patient and play the long game, but it depends how long you can afford to wait. Good luck.
 
My daughter ‘did’ Camp America for a few summers a couple of years ago and was paid in cash in dollars. She put the cash in the safe and has gained more by doing nothing, than she would have lost had she exchanged the monies, each year she was paid. I would be patient and play the long game, but it depends how long you can afford to wait. Good luck.
Suspect we have around 1 month - exactly when brexit and elections are!
 
I wouldn't bet on short term exchange rate changes. Rather, you could take a look at options where the exchange rate commission GBP->USD is low. You could easily end up paying a 2,5% commission fee, while there may be options where you can trade against the current market rate.
 


Just wondering everyone's thoughts on exchange rates - we are waiting on ROFR and hope to receive something back in next few weeks but not sure what to do in terms of exchanging money. Part of my thinks that we should exchange at the current 1.29 rate but with Brexit and Presidential elections this could all change. The Wife thinks we should wait in the hope it goes back up to 1.3+ , however its a gamble.

It's just gone to 1.3 this morning so could be worth looking if you haven't. :)
 


"The only certainty is uncertainty". From the sounds of it you have a large(ish) expenditure in a currency you do not have on hand and I'm assuming you do not have a USD revenue source. How low can you tolerate rates to fall before you would feel it hit? How likely would rates swing past that point?

You can reduce some of the risk with smaller transactions spaced apart. This would protect against swings in rates but also dampen the effect of any rate improvements. Watch out for transaction costs if you plan on doing this.
 
Depends how many points you're buying, and wether £100-200 variance is an issue for you.
 
I have just been through this on my purchase which closed early this month.

Early in September the rate was as high as 1.34 but had plummeted to 1.24 at times since then.

On my closing payment this had the potential to cost me over £800.

I was watching the rates almost hourly when my payment was due. In the end I plumped for 1.28 (which was 1.27 using a transfer company).

This still meant it cost me around £500-600 more than I thought it would, but depending on how Brexit shakes out the rate could easily drop to 1.20 and I didn't want the stress of worrying about that. Was it a "good" rate? Not really, but it could have gotten a lot worse.

Ultimately I'd recommend pulling the trigger when it's at a rate that you could live with....as we are approaching a very turbulent period and it is hard to know whether the result will be positive or negative (i.e. a Brexit deal or no deal).
 
I've been looking at this too - and the experts say... well they say they don't know... However, they reckon Covid is having more of an impact than either Brexit or the election. Plus, even if you try to stay one step ahead of the Brexit news (deal worked out? etc) - the markets will have already reacted to that news. I did read one report that said end of 2020 is going to be a disaster for the dollar, but that's a long way off. I've become a bit addicted to checking the exchange rate because my DVC purchase has been going up and down by around £200 either way over the past two weeks. I've decided though to pay for my purchase on Monday and Tuesday of next week, relying on 48 hours of uncertainty to keep the rate favourable. But if you have a better plan let me know because I'd love to buy at the top of the curve!
 

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