Thoughts on Converting Euro Savings to GBP

[Jim2007]

i'd imagine they'd let the new punt devalue until our economy improves before re-pegging to sterling.

The days of empire are long gone and the UK is only one of a number of trading partners as opposed a dominant partner, pegging if it did occur would make more sense against the dollar or the new Mark or another strong European currency.

Jim

 

[44brendan]

How about the Yuan!!

 

[Jim2007]

Which to my mind would mean that I would get a fair few more punt nua's by moving my euro into sterling now rather than leaving my money in euro's now and waiting for the devalued punt nua to arrive.

It seems to me that you are making an awful lot of assumptions....

First of all that the UK is a strong economy, in reality it is not that far ahead of Italy, so I would not be at all surprised if it gets hit with some downgrades in the coming months. There is one big difference, unlike Italy, it will not have the might of the German economy behind it if this does happen...

Despite all that has been said, the Euro is still a strong currency and the currency of our biggest trading area, so tracking the Euro would be far more important than the Pound.

In a small open economy, like Ireland, devaluations have not proven to be much of an answer, while a few economists have advocated it, it is not the general consensus. Our exports are doing well and in general are not price sensitive, so claim that a devaluation would be the answer is questionable.

You should also remember that back in late summer may people move to the Franc on the basis that it was the safe place to be, only to see up to 20% of their savings disappear when the SNB decided to peg the Franc to the Euro!

Then of course there is the possibility the it will not happen, the Pound continues to decline or the Euro rises or both and you could loose again!

Jim2007

 

[e_drizzel]

The days of empire are long gone and the UK is only one of a number of trading partners as opposed a dominant partner, pegging if it did occur would make more sense against the dollar or the new Mark or another strong European currency.

Jim

it is our largest individual partner. one third of our imports are from the UK and 15.5 % of our exports go there. maybe not a dominant partner but big enough that it would make better sense for us to use sterling rather than euro.

 

[Daddy]

It seems to me that you are making an awful lot of assumptions....

First of all that the UK is a strong economy, in reality it is not that far ahead of Italy, so I would not be at all surprised if it gets hit with some downgrades in the coming months. There is one big difference, unlike Italy, it will not have the might of the German economy behind it if this does happen...

Despite all that has been said, the Euro is still a strong currency and the currency of our biggest trading area, so tracking the Euro would be far more important than the Pound.

In a small open economy, like Ireland, devaluations have not proven to be much of an answer, while a few economists have advocated it, it is not the general consensus. Our exports are doing well and in general are not price sensitive, so claim that a devaluation would be the answer is questionable.

You should also remember that back in late summer may people move to the Franc on the basis that it was the safe place to be, only to see up to 20% of their savings disappear when the SNB decided to peg the Franc to the Euro!

Then of course there is the possibility the it will not happen, the Pound continues to decline or the Euro rises or both and you could loose again!

Jim2007

Thanks - read somewhere recently that the SNB are believed to be getting into Sterling in a much bigger way in the coming 12 months. I know full well that nothing is certain and that includes the UK economy. But as I said in the opening thread I just believe Sterling may be a better place at the moment. I do appreciate the risks and I do also appreciate all the posts. I still retain my savings in Euro but am organising an account opening in the North in the next week or so and that if things disimprove I am ready as I can be to transfer. The worst case scenario is the closing of borders etc., etc.,

 

[Jim2007]

it is our largest individual partner. one third of our imports are from the UK and 15.5 % of our exports go there. maybe not a dominant partner but big enough that it would make better sense for us to use sterling rather than euro.

And on the other 85% we just take a hit.....

Good luck with that,

Jim.

 

[Jim2007]

Thanks - read somewhere recently that the SNB are believed to be getting into Sterling in a much bigger way in the coming 12 months.

I'd take that with a large dose of salt! Switzerland needs to peg to the Euro for one reason - exports! Sterling does not come in to the equation. Unlike other central banks the SNB is a public company that must report profits/losses each quarter and while it is acceptable to report losses on the Euro at present, getting it fingers into anything else right now would cause uproar, even if it was profitable.

Jim

 

[e_drizzel]

And on the other 85% we just take a hit.....

Good luck with that,

Jim.

the point is that the UK is our biggest individual trading partner (comparaple to the rest of the EU combined) so it makes just as much sense for us to be pegged to £ as to be part of the €.