# Sterling savings? Should i convert them to Euros now?



## garythegreat (29 Dec 2007)

I currently habe £8k sitting in a lloyds TSB account, I was happy enough to leave it there as I was getting around 5.5% intrest.

But I had a quick look at the exchange rates and seen how the pound is falling agianst the euro, ive lost 600euro over the last couple of months.

Would now be a good time to take the money out and convert to euros, or am i better of waiting? ie will the sterling value rise again/euro decrease?

What do you think would be the best option?


----------



## Slim (29 Dec 2007)

*Re: Sterling savings? SShould i convert them to Euros now?*

I am in a similar situation. I have some stg with Anglo at 5.92% for 1 year. I think I will wait the year out as stg is taking a beating at he moment.

Slim


----------



## I{U}Ireland (29 Dec 2007)

*Re: Sterling savings? SShould i convert them to Euros now?*

I have 10k USD sitting in current account with almost 0 interest 

I am not sure when should I convert to Euros!!!


----------



## tightkerrman (29 Dec 2007)

*Re: Sterling savings? SShould i convert them to Euros now?*



I{U}Ireland said:


> I have 10k USD sitting in current account with almost 0 interest
> 
> I am not sure when should I convert to Euros!!!


 
If you are going to keep it in USD for a while (i.e. if you believe that the US dollar weakness is cyclical, not structural as some economists do) then why not put that 10k USD to work for you in a high-yield deposit account in the US? See the weekly summary at bankdeals to get an idea of rates you can achieve - http://bankdeals.blogspot.com/search/label/weekly summary?max-results=1.
Check the savings/money market accounts - rates of 5% are easily achievable, despite the fall in US interest rates in recent months. Almost all of these accounts can be opened online, without any direct interaction with a physical branch or submission of handwritten paperwork (unlike Ireland ).


----------



## PMU (29 Dec 2007)

*Re: Sterling savings? SShould i convert them to Euros now?*

[FONT=&quot]If you intend to spend this money in or retire to the UK leave it there (i.e. if the GBP is your ‘functional currency’).  If you intend to spend this money in or retire to IE or some other eurozone country (i.e. if the EUR is your ‘functional currency’) it probably makes sense to repatriate it. If the GBP is not your functional currency, the only reason to hold GBP cash deposits is if the return on the deposit gives you a return greater than the return on GBP-denominated gilts (including a risk premium for holding the riskier cash deposit). (Otherwise, why would you hold GBP cash deposits?)  If this is not the case, you could consider investing the money in GBP gilts or corporate bonds; or repatriate it; or spend it.
[/FONT]


----------



## I{U}Ireland (31 Dec 2007)

*Re: Sterling savings? SShould i convert them to Euros now?*



tightkerrman said:


> If you are going to keep it in USD for a while (i.e. if you believe that the US dollar weakness is cyclical, not structural as some economists do) then why not put that 10k USD to work for you in a high-yield deposit account in the US? See the weekly summary at bankdeals to get an idea of rates you can achieve - http://bankdeals.blogspot.com/search/label/weekly summary?max-results=1.
> Check the savings/money market accounts - rates of 5% are easily achievable, despite the fall in US interest rates in recent months. Almost all of these accounts can be opened online, without any direct interaction with a physical branch or submission of handwritten paperwork (unlike Ireland ).


 
I am not a resident in USA, Can I still open an account there??


----------



## garythegreat (31 Dec 2007)

*Re: Sterling savings? SShould i convert them to Euros now?*

I plan on spending about 5k of the sterling on a car over the next few months. The other 3k should i leave it as sterling or move it into euros? Euros are my main currnecy, i have no plans to live in the UK again.


----------



## tightkerrman (1 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*



I{U}Ireland said:


> I am not a resident in USA, Can I still open an account there??


 
Yes, non-residents of the US can indeed open a US-based bank account, with online access to the accounts, credit cards, and so on.  However, for opening a US account with a financial institution, the rules actually vary depending on the institution. All of the major banks (Citibank, Bank of America, Chase et al) WILL support non-resident accounts (it is a big market for them, and they have departments and business processes dedicated to them). Note that there are no restrictions on inflow or outflow of capital in the United States, and no local taxes to pay for non-residents. 

In all cases, you will need to fill out a W-8 declaration (typically the banks send this to you after opening of the account - the major purpose of this form is to specify that the signing party is a non-resident.
Sadly for non-residents, institutions are required to perform more thorough verification and background check for new account holders. Exact details vary by institution.

With all that said - given you have dollar-denominated funds in a bank account - is this already being held by an institution in the US? That institution may be able to offer a higher-interest account option for your funds.


----------



## PMU (2 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*



garythegreat said:


> The other 3k should i leave it as sterling or move it into euros? Euros are my main currnecy, i have no plans to live in the UK again.


 You should repatriate it.  You can’t ‘win’ on this due to purchasing power parity. Your 3 grand sterling will buy about the same amount of goods and services in IE as it will in the UK, once you take the exchange rate into account, due to purchasing power parity (any differences are explained by differences in taxes, etc.). Price differentials between countries are not sustainable in the long run as market forces equalise prices at the exchange rate, or change the exchange rate to do so.


----------



## garythegreat (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*

So do yis reckon i should go repatriate it straight away ( like tomorrow) or does anyone know if the sterling is going to strengthen again/euro weaken over the next few weeks?

i was happy to leave it in the sterling accoutn as i was getting 6.5% intrest on it which i wouldnt get here.

Also, whats is the cheapest way to convert it?


----------



## ClubMan (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*



garythegreat said:


> Also, whats is the cheapest way to convert it?


Maybe see if www.xetrade.com is of any use? It has been mentioned a few times in relation to similar queries.


----------



## garythegreat (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*

Have just had a look at that. Seems a bit dodgy wiring that much money to a company and then waiting for them to wire it back to you in another account.

Would it be a worthwhile saving from just doing it with the banks?


----------



## garythegreat (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*

Plus the value of the sterling is still getting worse everyday.

Dont know if its worth holding out or getting rid now.


----------



## ClubMan (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*



garythegreat said:


> Have just had a look at that. Seems a bit dodgy wiring that much money to a company and then waiting for them to wire it back to you in another account.


There is nothing dodgy about _XE/XETrade _as far as I know. _Google _for reviews/testimonials if you are concerned.


----------



## PMU (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*

[FONT=&quot]In your original post you said: [/FONT]





garythegreat said:


> I plan on spending about 5k of the sterling on a car over the next few months.



[FONT=&quot]This is the one area you can ‘win’, as there is no single market in cars and there is also market distortion due to VRT. So you should seriously consider buying a used car in the UK and importing it into IE.  You will almost certainly make more savings by doing this than by trying to second-guess exchange rate movements.  Also, note that you will need to comply with the new EU Third Money Laundering Directive if you repatriate EUR 15,000 or more.[/FONT]


----------



## garythegreat (3 Jan 2008)

*Re: Sterling savings? SShould i convert them to Euros now?*

Im going to use currency.ie or moneybooker.com (which is better?) to transfer all my sterling into Euro straight away. The wait a couple more months and hope the sterling keeps to devalue, then go over and buy a car in the UK. The sterling is dropping in value fairly rapid and i dont want to wait.

Would currency.ie (transfermate) or moneybooker.ie be better or much the same?


----------



## thomsk (4 Jan 2008)

What rate are they offering? ie. how many euros will you get for your sterling?
I would be tempted to ask around a few fx companies to see which offers the best rate. You may have to register with them - but it usually costs nothing.


----------



## garythegreat (4 Jan 2008)

As of todays rates:

Xetrade: £8012 gets me 10645euros
Currency.ie: They will call me tomorrow to tell me what they can do.

Any other sites that do this? moneybooker have limits of £1k which is useless to me


----------



## garythegreat (4 Jan 2008)

Im using currency.ie but my Lloyds TSB account wont recognise their sort code?

keep getting the message:

Sorry we are unable to progress with your request                            

                                                             131220 - We cannot find the sort code you've entered in our list of Bank sort codes.                             

 Please click the 'Back' button on your browser and check that you've entered the correct sort code.

If you are sure that the sort code is correct then please ask the person you are paying to check the sort code with their Bank.                             

Its the correct sort code as ive asked them again and im entering it correctly?
maybe this is a sign!


----------



## thomsk (5 Jan 2008)

Rationalfx are maybe worth investigating. Give them a call and they will usually try and beat the quote you have got. Also, no commission or wire transfer fees,as far as I know, above £5000. Moneycorp may be worth trying aswell.
Ps Don't volunteer the fact that you have already had a quote, unless their rate comes in below 1.3286


----------



## garythegreat (5 Jan 2008)

Its all done now - £8k got me 10660euro from transfermate, that was the best rate. Its a good bit lower than it was a few months ago - last time i checked back in october i would of got 11300euro for the 8k.

But thats how the cookie crumbles.
How it just keeps falling now so i'll get cheaper trips to the UK!


----------



## ccraig (10 Jan 2008)

Hi Gary
How did you transfer your sterling back in the end?


----------



## garythegreat (10 Jan 2008)

ccraig said:


> Hi Gary
> How did you transfer your sterling back in the end?



i used transfermate (currency.ie)

They gave me the best rate, were very professional etc.
Got charged 10quid for the wire though


----------



## garythegreat (14 Jan 2008)

Just worth noting the euro hit a real high against the pound today...cant see this lasting. Cant be good for the euro zone if the euro is so strong agaisnt both the pound and doller.


----------



## ccraig (15 Jan 2008)

not bad considering other banks charge 20 pounds plus. might drop em a line


----------



## MichaelDes (15 Jan 2008)

garythegreat said:


> Just worth noting the euro hit a real high against the pound today...cant see this lasting. Cant be good for the euro zone if the euro is so strong agaisnt both the pound and doller.


 
Sterling is at its lowest since the inception of the Euro but according to some analysts the euro could again reach £0.90. That's the rate it had gone to previously against the German DM, when it was pegged prior to €uro entry.

The weakness of the Dollar and Sterling must be unbearable for corporate Ireland. Given our inflation figures, can it be sustainable?


----------



## Marie (15 Jan 2008)

Michael can you unpack that comment a bit more please as this is where I get confused about international money-markets.  How does the weakness of sterling and $ make the trading situation of Euro-zone countries tougher?  

Meanwhile in terms of the relationship of sterling and $ that is also confusing.  Four - five years ago purchasing academic books from the USA was a great bargain when using sterling.  My last transaction last week was almost $ for £1........+ carriage, not so good.  Is it that the strength of Euro will mean (for example) lower tourist figures next year because the relative strength of their and other currencies to Euro means a holiday in Ireland will cost more?


----------



## MichaelDes (15 Jan 2008)

Marie said:


> Michael can you unpack that comment a bit more please as this is where I get confused about international money-markets.


 
Marie, in short if you want to visit Ireland again it will cost you 15% more on Sterling compared to a visit say during the summer. The strong euro makes it difficult for Irish exporters to sell products to the UK and America, our two largest trading partners. This double squeeze is a nightmare but great for ROI shoppers heading North. For example I bought my wife an expensive watch for her coming 40th. The shop had a 20% sale and the currency divergence in the last 6 months mean't a further saving of 15%. Paid for on €uro credit card, as shops gives lousy rates on cash.


----------



## thomsk (16 Jan 2008)

For anyone interested....I compared  rationalfx with transfermate ( phoned both. The firm that offered the best deal was rationalfx. ( I would generally never use banks for large quantities of foreign exchange).


----------



## Marie (16 Jan 2008)

Thanks Michael!  I'll use funds from an Irish account when I attend a family wedding in April so I don't get whacked by the exchange-rate.  

In the short to medium term, is there any strategy for lessening the effect on the economy of an over-strong Euro?  Would it 'weaken' if trade and profits decrease even further..........or does any change depend on what happens with $ and £  ?


----------

