Ryu

Hi,

Just trying to figure out what the best course of action is with regards to savings. I'm moving out to Dubai in late June.

My idea so far: as the AED is pegged to the USD, if I open an offshore USD savings account - I will know exactly how much money is being saved each month in a stable currency. Assuming I want to return to the UK in future, and am able to wait till there is a good exchange rate between USD and GBP (good for me, i.e. USD strong against GBP) before I transfer the money back to GBP.

The pitfall for this route is that I'm transferring currency twice, from AED to USD, then USD to GBP. So two fx transactions, although as the amounts will be large from USD to GBP, I would get a reasonable wholesale rate/low spread.

Benefits: the monthly USD savings will be fixed as the currency is pegged. If anything were to happen to the AED (e.g. depeg from USD and suffer on the markets) my savings would be USD and so hopefully secure.

Any views from the experts? Do you save offshore in GBP directly?

Thanks.

Jeeper

Firstly - defo don't save in AED. Send savings offshore in a 'real' currency....probably USD.

Re: Sterling vs USD

If you transfer from AED to GBP on a regular basis (monthly?) over many years then sometimes you'll have done well and sometimes you won't have...it might average out ok.
Or you can take the riskier route and hold USD until you think the GBP is at a favourable (low) rate for you. The way things are in the UK this might be the best course of action....but exchange rates are notoriously difficult to predict at the best of times....let alone right now.

Personally, I'd keep it in USD for now as I think the USD is about to stage some sort of recovery and the sterling has further to fall (looking over the course of the next year...). But who really knows

The Dean

Hi there..........

I've just passed 33 years in the foreign exchange market/industry (in one form or another), so I'm fully qualified to advise you about the likely future path for exchange rates.

My verdict: I haven't a clue.

As Jeeper says, there are so many factors that influence rates - cross-border trade flows, investment trends, speculators, tourists, etc.

Question - what are you saving for? And where will you be when you finally spend those savings? Do share with us, please.

The GBP is much weaker (i.e. cheaper to buy) than it has been for over a year, so you would already be ahead of the game on that score........

BurpusMe

Don't leave money in UAE banks.

Save in USD for now, and start converting to £ in small clumps in a few years pending the situation at that time (if you can wait that long).

BurpusMe

Or do what the dean says!

Ryu

Saving for: probably property in the future

Where: probably UK, although could potentially be USA. Most likely a western English speaking country.

When: 5 years? Don't know yet...

Thanks for the advice all who replied!

Jeeper

That's what I said....send it offshore....it was the first line I wrote.

expatasia

The Dean

Talking about weak Sterling, do you have a clue at what kind of rate the Eurozone would likely accept Britain's joining the Euro (inevitable sooner or later IMO)? They surely wouldn't take the kinds of 1.1 ratio we are seeing now, would be too much of a competitive advantage. The Pound has halved vs the Yen in the last 2/3 yrs. Funny old game.

Thanks.

Ryu

Yes, I am planning on opening a Jersey HSBC account to begin with, they guarantee upto 50k GBP in savings like the UK Gov scheme. I've banked with HSBC for a long time, happy to use their online banking to transfer money around.

Jeeper

Hope you don't use them to actually change your cash from one currency to another? Their rates are a rip!

The Dean

The GBP joining the EUR?

That would be my second preference. My first preference would be to get struck by lightning while standing barefoot in a pool of water while holding a metal rod high above my head.

Why on earth would the UK give up the right to control its own economic and monetary policy? Look at the mess the rest have made. Only the basically anti-British Lib Dems even contemplate it at the moment, and they can be ignored.

I predict a different future - the EUR will crumble to pieces before the GBP gets round to joining. It was always a political project, cobbled together by supra-nationalists who didn't understand market forces.

Ryu

I will leave that side of the operation to my wife, who was an FX broker in the uk until recently! I'm aware that bank rates are low...

expatasia

Thanks for answering, I don't agree - you're the expert though. How long before the Pound is worth less than one Euro?

Brains1983

Wasn't that long ago I paid 0.91 GBP for 1.00 EUR at a UK airport.


I'm interested in this thread too, after I've finished Ikea-ing the house I'll be aiming to start some savings.

Christ only knows what currency mind, earning AED and eventually needing BRL. missed the boat on that currency me thinks... I guess USD does seem the safer one since you know what your getting with the AED.