Bethan2

It's a useful exercise to do such calculations and I now have several sheets of paper with numbers on them! Just to feedback on my visit to HSBC on Thursday, they said there are three types of account that I could open in CAD in the UK:

1. Foreign Currency Current account
2. Foreign Currency Instant Access Savings Account
3. Foreign Currency Fixed Term Savings Account

The current account has a chequebook so cheques can be written in CAD. This saves the time and expense of organising Drafts. Sometimes a recipient's bank may require extra cheque clearance and they may face charges for this and may therefore not accept a CAD cheque from a UK bank, so I would have to check it was OK before sending. There is no interest and a fee of £5 per month plus £1.50 for each cheque.

The Instant Access Savings Account gives a miniscule amount of interest.

The Fixed Term Savings account can be arranged for 1 month, 3 months, a year, etc. If we decide to go for this, we would have it at 1 month which automatically rolls on into the next month, etc. This means that at most we would be giving a month's notice to withdraw our funds. For the amount of money we would be looking to bank when we sell our house we would be looking at an interest rate of 2.55%. At the same bank, they quoted a rate of 3.2% for the same amount in sterling.

So the bank fees and the different interest rates have to be incorporated into the calculations too.

This has been a very useful exercise (and a helpful thread) and I think we can sit down and sort out some kind of strategy. Whatever happens to the exchange rate, we look forward to our new life in Canada with no regrets.

CalgaryBlade

Actually it was increased to 3.75% this week, still lower than 4.5% in the UK.

Gezza

What you say is perfectly sound. In which case which of these, in your opinion, explains the drop of CAD last week?
In U.K. it is now quoted at 2.01?and not 1.89 as last week

CalgaryBlade

The Bank of Canada signalled that it might not have to put IR's here up as much as was being predicted.

There was talk of IR's here going up to 6%, now the predictions are around 4.5%.

RupesMandy

What was showing as 1.89 in the UK last week? If that was the tourist rate then fair enough but I very much doubt that the tourist rate is 2.01 today so we need to be careful that we are comparing apples and apples. There was not a 12c swing last week.

For what it is worth, I have put the slight £ recovery against the Canadian $ down to a cooling of expectations of the future price of oil. Whilst not a huge change in the actual price (I have no idea if oil actually went up down or sideways last week), less bullish sentiment will have taken some of the value that future high prices had built in to the CDN$.

Posidrive

Pretty sure the 1.89 must have been a finger slip. It was 1.98.

the oil price has weakened a bit recently, so that helps plus there is also talk of dropping rates again later in the year since exports are suffering due to the strength of the dollar

MarkG

Probably, but there also seems to be a small sentiment towards raising interest rates in the UK now too. Personally I think I'm going to transfer my free savings into CAD now for safety rather than risk it dropping to $1.80... I'll keep the ISA for the time being and at the rate I'm saving money I'll have plenty more to shift over next year if rates have improved.

Certainly in the long run the pound is going down because we're running out of oil, but in the short run I wouldn't be entirely surprised to see a return to $2.20-ish if the BoE get their act together. My guess is they'll have to raise rates in the next six months or become a global laughing stock as everyone else raises them.

Gezza

I am sure I saw the London Evening Standard quoting at 1.89 at least once in the last 3 weeks. Wheather that was Tourist Rate I am not sure. But I always get my quotes from Daily Papers.
One thing which uis intersting is that some papers are still today quting 1.90 while others show 2.00. I can not remember that kind of dispersion between sources.

MarkG

Yahoo's quoting 2.0199 right now: they've generally been pretty close to the rates I got from HSBC for converting 20,000+.

Gezza

Thats very reassuring Buddy. I bank with HSBC too.

Gezza

So where are all those who said the way was only Down?!

Bethan2

If we had waited with our drafts we would have been nearly £2000 better off at today's rate, but we decided to go for it and not have any regrets, which hasn't worked because I do regret being nearly 2 grand worse off!!

MarkG

Yeah, I'm going to wait a few days and see if things continue to improve before transferring that money .

Two million I could see being regretful about: that's enough money to make a major difference to my life. Two thousand really isn't worth having regrets over... heck, even another twenty thousand wouldn't change my life in any meaningful way.

Then again, my stock options were worth $200,000 less by the time they vested than they were when I was given them, so I'm used to losing large amounts of money on paper .

CalgaryBlade

Ifs and buts, hindsight is a wonderful thing.

I changed the money from our house sale at $2.45 in a panic. The rate then hit $2.50 and my wife didn't speak to me for a few days

CWEMM02

The key to the exchange is to do it at a time that seems right. You make your decision based on your needs and the information you have at hand. If you do so, you should have no reason to regret anything. If we could pick the best time to buy any stock, exchange our money, buy or sell a propety then we would all be rich and living on some island some place warm. The fact is that we can't be 100% right all the time. Why not be happy with the fact that you made a good decision based on the facts at the time. Keep in mind that currency trends develop over long periods of time and so you can never get it at the very best moment if you only have one chance, if you do, it was by luck.