Exchange rate

Old Sep 1st 2008, 3:49 pm
  #1441  
BE Enthusiast
 
Joined: May 2006
Location: Fall River, NS
Posts: 478
Southcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of lightSouthcote is a glorious beacon of light
Default Re: Exchange rate

Originally Posted by Surrey Expat
Once you become a tax resident in Canada, that is taxed at your marginal rate.
So you don't get to keep it all.
Granted, but the net rate 7% is still higher than the net rate on the 4.75% I'm currently getting
Southcote is offline  
Old Sep 1st 2008, 4:38 pm
  #1442  
Tea Drinker
Thread Starter
 
Danny B's Avatar
 
Joined: Nov 2006
Location: Kamloops, BC
Posts: 5,387
Danny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond reputeDanny B has a reputation beyond repute
Default Re: Exchange rate

Chancellor joins the assault on Sterling
- "Worst" UK economic downturn in 60 years
- Canadian growth disappoints in Q2

Sterling never made it much higher than Tuesday's $1.94 opening. It spent the week in range between there and $1.91, opening in London this morning at $1.9250.

Three-day weekends in London and New York bracketed a short and illiquid four-day trading period. Market reactions to the news and data were not always as logical or measured as might normally be expected. A sharp drop in German business confidence on Tuesday did just as much damage to the Pound as it did to the Euro. The retrospective justification was that a downturn in Germany would mean a downturn in the Euro zone as a whole; bad news for British exports to its biggest trading partner. Looking at Sterling's performance on Thursday it was hard to believe that Nationwide's house price index and the CBI's Distributive Trends survey had both just delivered their worst results ever; the Pound held within a half cent range against the Euro and was unchanged on the day.

There was no such indifference to Chancellor Alistair Darling's weekend interview when he told The Guardian that Britain faces "arguably the worst" economic downturn in 60 years which will be "more profound and long-lasting" than people expect. His words came as an "et tu Brute" for Sterling, costing it two cents against the Dollar and the Swiss Franc, a cent against the Euro and nearly three Yen over the weekend. The surreal image springs to mind of Britain's finance minister joining his central banker to chuck concrete lifebelts at their currency. With friends like these the Pound needs no enemies.

The Canadian Dollar did almost as badly as Sterling. Figures on Friday for second quarter GDP showed slower than expected 0.3 per growth. Because the number was positive it avoided the technical definition of recession (two or more successive quarters of contraction). It still meant however, after a 0.8 per cent decline in Q1, that Canada's economy shrank in the first six months of the year.

The main culprit in the slowdown was external trade. Between December and June the Loonie's average exchange rate against the US Dollar was close to par. The strong currency sucked in imports and dampened exports.

Canada's economic slowdown leads some analysts to believe the next move for Canadian interest rates will be downwards. Few look for any change at this week's policy meeting but the odds have definitely shortened and the Loonie is feeling the strain. The same argument applies to UK interest rates and Sterling after the chancellor's hatchet job. The Pound is still - just - within the extremes of its 12 month range against the Canadian Dollar but on other fronts it looks very vulnerable. Buyers of the Canadian Dollar should continue to hedge, buying half their requirement forward.
Danny B is offline  
Old Sep 1st 2008, 5:02 pm
  #1443  
Banned
 
Joined: Aug 2007
Location: New Caledonia
Posts: 1,810
Surrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by Southcote
Granted, but the net rate 7% is still higher than the net rate on the 4.75% I'm currently getting
You will also have to deal with currency gain (or loss) on any interest earned then converted to CDN$. Tax is due on interest paid as well as any gain (or offset as a loss) on the currency at the time it is exchanged from the time it was paid. Also the capital sum invested is subject to a currency gain (or loss) and is subject to taxation at the time of conversion.

Any foreign property or funds held valued at over $100,000 should be declared on your Canadian tax return.

'Foreign currency funds on deposit are not considered to be disposed of until they are converted into another currency or are used to purchase a negotiable instrument or some other asset, i.e. foreign funds on deposit may be moved from one form of deposit to another as long as such funds can continue to be viewed as "on deposit". Term deposits, guaranteed investment certificates and other similar deposits which are in fact not negotiable, are considered funds on deposit. Transactions in which foreign currency funds are invested in negotiable instruments such as notes, bonds mortgages, debentures, U.S. government treasury bills and notes and U.S. commercial paper, will require a foreign exchange gain or loss calculation at the time the foreign currency funds are used to purchase these investments and as well, each time such investments mature or are otherwise disposed of, whether or not the funds are rolled over into like securities.'

Depending on the movement of the exchange rate, any gain in interest can be easily and quickly lost if the exchange goes against you. In the last 18 months the GBP/CDN has dropped over 17%. On a £200,000 investment the difference could be in the region of an extra £4500 if the rate is unchanged. If you had held that 18 months ago your £200,000 would have netted you
CDN$468,000, today it could have been in the region of CDN$383,000, a loss of CDN$85000, offset by a 2.25 gain in interest rate of say CDN$8595, a net loss of CDN$76400

This is not financial or investment advice, it is a simplistic approach and gains and losses can be quite variable, there are never any certainties with currency exchange. However hopefully this illustrates a few of the considerations, weighing the potential gain of 2.25 in interest with the potential costs and risks, not to mention the hassle.

You may be best to consult a financial professional (accountant) before making a decision.

P.S. You mentioned net rates. Interest in Canada is paid gross, tax comes off that. Is the rate you are looking at in the UK net or gross?

Last edited by Surrey Expat; Sep 1st 2008 at 5:07 pm. Reason: Post script added
Surrey Expat is offline  
Old Sep 1st 2008, 7:53 pm
  #1444  
BE Forum Addict
 
Joined: Jun 2007
Location: Musquodoboit Harbour, Nova Scotia
Posts: 2,549
destinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond repute
Default Re: Exchange rate

UK banks generally advertise the net rate. If you are a none resident in the UK and have no taxable UK income yo can comlete a form from your UK bank to ahve the interest payed tax free.
destinationnovascotia is offline  
Old Sep 2nd 2008, 2:15 pm
  #1445  
Banned
 
Joined: Aug 2007
Location: New Caledonia
Posts: 1,810
Surrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond reputeSurrey Expat has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by destinationnovascotia
UK banks generally advertise the net rate. If you are a none resident in the UK and have no taxable UK income yo can comlete a form from your UK bank to ahve the interest payed tax free.
Nett rate - After Tax
Gross - Before tax

If 7.5% is paid nett and as a non tax payer you get gross, then the effective rate is quite a lot higher than 7.5%. Might want to check this our for confirmation. My guess is the quoted rate is gross, before tax. The rates i found on Nat West are more in the region of 4.5% to 5.13% (gross), not far off those of Canada and with the added risk of exchange fluctuations.

Today's rate on the GBP/CDN - $1.88 small amounts and $1.90 larger sums. Just when you think it cannot go further.
Surrey Expat is offline  
Old Sep 2nd 2008, 5:52 pm
  #1446  
BE Enthusiast
 
Joined: Jan 2008
Location: West Lothian
Posts: 685
G586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by destinationnovascotia
UK banks generally advertise the net rate. If you are a none resident in the UK and have no taxable UK income yo can comlete a form from your UK bank to ahve the interest payed tax free.
I think they quote gross rates in the UK.
G586 is offline  
Old Sep 2nd 2008, 6:24 pm
  #1447  
BE Forum Addict
 
Joined: Jun 2007
Location: Musquodoboit Harbour, Nova Scotia
Posts: 2,549
destinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond reputedestinationnovascotia has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by G586
I think they quote gross rates in the UK.
Really!! I really is my week for misunderstanding everything. Can I still blame jet lag after 3 weeks?
destinationnovascotia is offline  
Old Sep 2nd 2008, 6:38 pm
  #1448  
BE Enthusiast
 
Joined: Jan 2008
Location: West Lothian
Posts: 685
G586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond reputeG586 has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by destinationnovascotia
Really!! I really is my week for misunderstanding everything. Can I still blame jet lag after 3 weeks?
Of course!

I get horrific jetlag, much sympathy.
G586 is offline  
Old Sep 2nd 2008, 10:29 pm
  #1449  
Forum Regular
 
vegasrockstar's Avatar
 
Joined: Feb 2007
Location: Indian Head, SK
Posts: 145
vegasrockstar will become famous soon enoughvegasrockstar will become famous soon enough
Default Re: Exchange rate

I would have thought that the announcement about upping the stamp duty threshold to 175k would have had some positive effect on the exchange rate, but, as it's currently floating around the 1.90 mark, obviously not.
vegasrockstar is offline  
Old Sep 3rd 2008, 12:16 am
  #1450  
BE Enthusiast
 
Joined: Aug 2005
Location: Was Brentwood, Essex Now Wasaga Beach, Ontario
Posts: 895
cneldred will become famous soon enough
Default Re: Exchange rate

That in no way makes the UK a more attractive investment. House prices are still hugely overvalued. Tomorrow is Bank of Canada rate announcement, the market is expecting unchanged. Then Thursday is rate decisions in Europe, same expected there. US unemployment numbers follow on Friday.
cneldred is offline  
Old Sep 3rd 2008, 2:47 am
  #1451  
BE Forum Addict
 
geedee's Avatar
 
Joined: Nov 2006
Location: Nusajaya
Posts: 2,327
geedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by vegasrockstar
I would have thought that the announcement about upping the stamp duty threshold to 175k would have had some positive effect on the exchange rate, but, as it's currently floating around the 1.90 mark, obviously not.
I feel sick.....
geedee is offline  
Old Sep 3rd 2008, 8:07 am
  #1452  
APC
Just Joined
 
Joined: Aug 2008
Posts: 18
APC is an unknown quantity at this point
Unhappy Re: Exchange rate

Xrate just getting worse 1.89 GDP/CAD now

It would be better if Darling/Brown/UK GOV just shut up!! rather than talk us into a recession.

If these moron's were like normal people in any other job they would have been fired long ago - sheer incompetence and corruption in claiming expenses/wasting taxpayer money etc... is beyond belief!

I'm now worried whether I can achieve/realise the reasons why I intended to move to Calgary/Canada because of the strength of CAD $ . This would now leave me in a seriously weaker position to start from than I am presently in the UK?

Anyone else in a similar frame of mind have these worries?

I'm just praying (all I can do) that some normality returns to the Xrate market but I'm fearing the worst............
APC is offline  
Old Sep 3rd 2008, 2:30 pm
  #1453  
BE Forum Addict
 
geedee's Avatar
 
Joined: Nov 2006
Location: Nusajaya
Posts: 2,327
geedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond reputegeedee has a reputation beyond repute
Default Re: Exchange rate

Originally Posted by APC
Xrate just getting worse 1.89 GDP/CAD now

It would be better if Darling/Brown/UK GOV just shut up!! rather than talk us into a recession.

I'm just praying (all I can do) that some normality returns to the Xrate market but I'm fearing the worst............
With the morons "in charge" of the UK it can only get worse. They are an absolute joke. "No more boom and bust" my @rse. I can see the pound in free-fall until these loonies are driven out of office.

There are some saying darling did this on purpose to weaken the pound which will be good for exports. What exports???? We don't make anything anymore. But we do import just about everything.... imagine what that will do for inflation.

Victor Meldrew mode off.
geedee is offline  
Old Sep 4th 2008, 12:22 pm
  #1454  
BE Forum Addict
 
chumley's Avatar
 
Joined: Jul 2008
Location: My Utopia Nova Scotia!
Posts: 1,368
chumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond reputechumley has a reputation beyond repute
Default Re: Exchange rate

1.88 now on yahoo
chumley is offline  
Old Sep 4th 2008, 12:31 pm
  #1455  
 
Joined: Jul 2007
Posts: 2,139
ireland2canada is an unknown quantity at this point
Default Re: Exchange rate

Eh? 1.88...on yahoo...to buy currency?
Sorry to be thick, do you mean yahoo the email people?
I'm all of a fluster!
ireland2canada is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.