Pound - Euro fx rate

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Guy M
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Pound - Euro fx rate

Postby Guy M » Wed Jul 31, 2019 6:18 am

Anyone living in Crete with income in £ and costs in € will be feeling the pinch now. Here are some consolatory and non consolatory thoughts.

If you move back to the UK you won’t completely avoid the impact of the £’s weakness: the cost of anything imported will be higher- but don’t worry: there’ll be fewer imported goods getting through UK ports after a No Deal Brexit so there’s less to spend your money on.

If you stay in Crete, the tavernas will have fewer British holiday makers - this is already happening - so you’ll be able to get a table, but spare a thought for local businesses who must already be really suffering through no fault of their own.

Projections from experts (ie people who know what they are talking about, not politicians) include possible parity with the € in the next couple of months, so this could be just the beginning - but at least you’ll have a blue passport when you go through immigration on your way home.

If you’re sensible and have hedged against currency risk (as I suggested on this forum after 2016) there might be some bargain properties to pick up from exiting Brits - but you may not be all that popular coming from a country whose leaders outdo themselves each day in the insulting, non diplomatic language they use and their harping back to a war none of them can remember.

bobscott
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Re: Pound - Euro fx rate

Postby bobscott » Wed Jul 31, 2019 6:58 am

Thanks for that Guy! Bob
Yesterday today was tomorrow. Don't dilly dally!

Guy M
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Re: Pound - Euro fx rate

Postby Guy M » Wed Jul 31, 2019 7:49 am

I forgot to mention: if you voted Remain, practice the phrase ‘I told you so’ and repeat saying it to Leave voters - it won’t stop you being poorer but it might make you feel better- and reduce your popularity.

scooby
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Re: Pound - Euro fx rate

Postby scooby » Wed Jul 31, 2019 9:31 am

Guy M wrote:Anyone living in Crete with income in £ and costs in € will be feeling the pinch now. Here are some consolatory and non consolatory thoughts.

If you move back to the UK you won’t completely avoid the impact of the £’s weakness: the cost of anything imported will be higher- but don’t worry: there’ll be fewer imported goods getting through UK ports after a No Deal Brexit so there’s less to spend your money on.

If you stay in Crete, the tavernas will have fewer British holiday makers - this is already happening - so you’ll be able to get a table, but spare a thought for local businesses who must already be really suffering through no fault of their own.

Projections from experts (ie people who know what they are talking about, not politicians) include possible parity with the € in the next couple of months, so this could be just the beginning - but at least you’ll have a blue passport when you go through immigration on your way home.

If you’re sensible and have hedged against currency risk (as I suggested on this forum after 2016) there might be some bargain properties to pick up from exiting Brits - but you may not be all that popular coming from a country whose leaders outdo themselves each day in the insulting, non diplomatic language they use and their harping back to a war none of them can remember.

Bloody hell guy lighten up. There are a lot of people in the world a lot worse off in terrible situations. With all due respect I find the post a bit self centred.
Get Brexit done.

Kilkis
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Re: Pound - Euro fx rate

Postby Kilkis » Wed Jul 31, 2019 9:50 am

Be fair Scooby, when you were selling your house in Crete you were watching the exchange rate like a hawk hoping it would go lower. Did any of your friends who were staying here and who would suffer from a lower rate accuse you of being self centred?

Guy M wrote:...Projections from experts (ie people who know what they are talking about, not politicians) include possible parity with the € in the next couple of months, so this could be just the beginning -...


Back in April I wrote on another thread, emphasis added in red:

Kilkis wrote:I would guess it will stay somewhere in the range £1 = €0.5 to £1 = €2 but I wouldn't guarantee it. The range will probably be less but I wouldn't guarantee that either. All that is happening at the moment is that if today's news make it look like no-deal is more likely Sterling drops a bit but if today's news makes it look like no-deal is less likely Sterling strengthens a bit. Since the referendum it has pretty much traded between 1.1 and 1.2 which is quite a narrow range. There are a lot of other what ifs out there:

    1 What if project fear is correct and the UK goes into recession so that its already massive debt gets even bigger as a percentage of GDP causing a run on the pound and a large spike in gilt yields?
    2 What if Italian debt causes a world financial crisis 10 x bigger than Lehman?
    3 What if there is a crisis of confidence in the Euro causing it to split into a southern Euro and a northern Euro or some countries revert to a national currency?
    4 What if the China - USA trade war escalates into military conflict?
    5 What if the US$ ceases to be the world reserve currency and instead it becomes the IMF SDR but the UK are expelled from it because it has insufficient gold reserves to qualify?

Will any of that happen? Who knows but if anything like that does then 1.1 to 1.2 is going to look like "strong and stable. Keep watching the big scary mouse and forget all about the lions and tigers in the world. You'll sleep better.

Warwick


Today we are in the "no-deal more likely" regime so Sterling is falling and the pound has dropped out of the 1.1 to 1.2 range. Currency traders talk in terms of support/resistance levels. If a currency is falling it tends to get down to a certain level and then rise again. If it does it repeatedly that is regarded as a support level. In the reverse case, i.e. rising to a certain level and then falling repeatedly it is a resistance level. When a currency falls through a support level you start looking for the next level that might provide support and things like "parity" are seen as mystical values so I suspect that is why the "experts" are talking about falling to parity in the short term. Also they look at the futures market. How big are the short positions, i.e. bets that the pound will fall, compared to long positions, i.e. bets that the pound will rise. I would bet that it is very heavy on the short side at the moment. They can also see how much speculators are shorting the pound and over what timescale so, on the basis of the wisdom of crowds, that gives them a pretty good idea of where it is heading. I think that the market has priced in the "risk" of no-deal but not necessarily the "reality" of no-deal so in the event of no-deal on October 31 I think further big falls are probable.

Warwick

PS The following is a quote from an Ed Conway article on Sky News about predicting currency exchange movements and what Alan Greenspan had to say about it:

    And lo and behold, he told me he put a "huge amount of resources" into predicting those foreign exchange movements.

    "We worked very hard, collected all the data - and we had far more than anybody else, because there was a lot of unpublished data on intervention and all that stuff which the Fed had.

    "The rate of return on that investment of time and effort and people was zero."

If the Fed has no idea neither does anybody else.

scooby
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Re: Pound - Euro fx rate

Postby scooby » Wed Jul 31, 2019 10:21 am

Your correct Warwick of course I was watching the exchange rate like a hawk when I sold the property but whether it was high or low I would have had to deal with it. The post from guy was just a bit depressing and yet none of us on here are destitute, it’s nothing personal towards guy but sometimes we have to take a step back and see bigger picture.
Regarding the exchange rates some will make a bucket load of cash because there will not be a “no deal “ situation and the pound will be stronger in about ooh let’s think, 3 months from now.
Get Brexit done.

Kilkis
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Re: Pound - Euro fx rate

Postby Kilkis » Wed Jul 31, 2019 11:13 am

scooby wrote:... yet none of us on here are destitute,...


You're not, I'm not and most of my friends aren't but I know people who are living on a basic UK State Pension with no other income and some who have a bit more but who are still struggling. Drops in the exchange rate of the magnitude that are occurring at the moment are a major problem to people like that.

To you it will make no difference as you are now back in the UK. To me and many of my friends it is an irritation. I will either reduce my spending or make up any shortfall by spending some of my savings; probably the latter since gin doesn't come cheap. If you had still been here you would have probably done the same. For some, however, it is a major issue.

Warwick

Maud
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Re: Pound - Euro fx rate

Postby Maud » Wed Jul 31, 2019 11:19 am

I do not know Guy, but I felt his post was written a little ‘tongue in cheek.’ - It made me smile.......rather than depressing me. Maybe others on here read it in a different light, but I don’t think it is Guy who needs to ‘lighten up!’
(Not that I thought the drop in the £ was amusing.....just the way Guy had written the post!)
Did anyone else hear Lord O’Neill on The World at One yesterday? - It is available on catch up. It is well worth listening to.

scooby
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Re: Pound - Euro fx rate

Postby scooby » Wed Jul 31, 2019 11:40 am

Kilkis wrote:
scooby wrote:... yet none of us on here are destitute,...


You're not, I'm not and most of my friends aren't but I know people who are living on a basic UK State Pension with no other income and some who have a bit more but who are still struggling. Drops in the exchange rate of the magnitude that are occurring at the moment are a major problem to people like that.

To you it will make no difference as you are now back in the UK. To me and many of my friends it is an irritation. I will either reduce my spending or make up any shortfall by spending some of my savings; probably the latter since gin doesn't come cheap. If you had still been here you would have probably done the same. For some, however, it is a major issue.

Warwick
As I have previously stated, I would never move to a different country without some capital behind me. People who moved abroad just on their pensions made their choice and must live with any fluctuations in exchange rates and any difficulties that may arise from living abroad, but to complain about it doesn't wash I'm afraid.
Get Brexit done.

Guy M
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Re: Pound - Euro fx rate

Postby Guy M » Wed Jul 31, 2019 11:47 am

Maud wrote:I do not know Guy, but I felt his post was written a little ‘tongue in cheek.’ - It made me smile.......rather than depressing me. Maybe others on here read it in a different light, but I don’t think it is Guy who needs to ‘lighten up!’
(Not that I thought the drop in the £ was amusing.....just the way Guy had written the post!)
Did anyone else hear Lord O’Neill on The World at One yesterday? - It is available on catch up. It is well worth listening to.


In one Maud :-)

Scooby is very right that a sense of perspective is a good thing and that others in the World are much worse off. It’s normally the case when faced with income inequality to try to raise the standards of those worse off - Brexit seems to be trying to lower the standards of the better off (globally speaking) which is quite a novel approach.

Kilkis
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Re: Pound - Euro fx rate

Postby Kilkis » Wed Jul 31, 2019 12:03 pm

Guy M wrote:...It’s normally the case when faced with income inequality to try to raise the standards of those worse off - Brexit seems to be trying to lower the standards of the better off (globally speaking) which is quite a novel approach.


I agree that Brexit is adversely affecting more affluent countries and hence "the better off (globally speaking)", but within those countries it is likely to be the worst off that will be affected the most. If the price of necessities rise, due to tariffs and/or currency devaluation, that affects those who spend all their income on necessities, i.e. the poorest in society, much more than those who have disposable income after providing those necessities, i.e. the better off. Not being able to afford heating or food is somewhat more serious than not being able to afford your golf club subscription.

Warwick

Keltz
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Re: Pound - Euro fx rate

Postby Keltz » Wed Jul 31, 2019 12:42 pm

A sense of perpective as mentioned by Scooby needs an understanding of recent history that has got us here, where Global capitalism started failing in the 1970's and redistribution of wealth has become a thing of the past with the wealthy frightened of loosing their accumulated wealth/power gained through employement of human resources have now used their influence at Contintent level (e.g. migration, North Korea) and government level (e.g. Brexit, Trump) to inflict fear while they sort out the mess they have created, all in the name of protecting the 1%.

But don't take my word for it "And The Weak Suffer What They Must?" - Yanis Varoufakis. Worth a read if you want to look further than daily events.

Carolina
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Re: Pound - Euro fx rate

Postby Carolina » Wed Jul 31, 2019 1:37 pm

scooby wrote:As I have previously stated, I would never move to a different country without some capital behind me. People who moved abroad just on their pensions made their choice and must live with any fluctuations in exchange rates and any difficulties that may arise from living abroad, but to complain about it doesn't wash I'm afraid.


Whoa.. take a step back scooby - this forum section is about Living in Crete and Brexit and it is entirely relevant if someone wishes to complain about Brexit affecting the exchange rate and any other difficulties arising from Brexit which will affect their lives here.

It's actually the whole point of this section being here on the forum i.e. to bring up the issues which will affect those of us here and what we can do to protect ourselves.

bobscott
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Re: Pound - Euro fx rate

Postby bobscott » Wed Jul 31, 2019 2:10 pm

A timely reminder Carolina. I too accepted Guy's remarks as a bit tongue in cheek. But I get a bit fed with hearing smug remarks referring to people who move to another country without sufficient capital behind them. We are lucky with our pensions which are by and large OK, and having sold our house here we have some capital behind us, but we NEVER took into account that the UK might decide to leave the EU. And it is the 'fear' of that which has reduced our income by about 22% since 2016. If we do end up with parity between pound and euro, that figure jumps to a little over 28%. Takes a bit of swallowing and absorbing, even with some capital behind us. Fortunately we are both well into the 'elderly' category, and are unlikely to outlive our bank balance! Bob.
Yesterday today was tomorrow. Don't dilly dally!

scooby
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Re: Pound - Euro fx rate

Postby scooby » Wed Jul 31, 2019 2:35 pm

Carolina wrote:
scooby wrote:As I have previously stated, I would never move to a different country without some capital behind me. People who moved abroad just on their pensions made their choice and must live with any fluctuations in exchange rates and any difficulties that may arise from living abroad, but to complain about it doesn't wash I'm afraid.


Whoa.. take a step back scooby - this forum section is about Living in Crete and Brexit and it is entirely relevant if someone wishes to complain about Brexit affecting the exchange rate and any other difficulties arising from Brexit which will affect their lives here.

It's actually the whole point of this section being here on the forum i.e. to bring up the issues which will affect those of us here and what we can do to protect ourselves.
I do apologise but I am only answering other posters who wish to debate.
Get Brexit done.


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