Dropping exchange rate
 

Thank you for your birthday greetings! The exchange rate greeted me this morning with the news that it is $1.383 to the pound. It was not long ago that I thought I was doing well because I was getting $2 to the pound. This is extremely relevant because my UK state pension and my Somerset County pension are paid in pounds to Lloyds TSB (now nationalised of course). How long will it be before the rate is 1:1 and I won't be able to pay the mortgage?:confused::mad:

Re: Dropping exchange rate
 

Bless your heart, then I guess you'll do what some of us here do and use dollars to pay the UK mortgage. We were taking it in the shorts when it was $2 and up to the pound.

Re: Dropping exchange rate
 

$2+ to the pound was not realistic, and could not last. Parity is $1.60. The exchange rate at normal time runs around $1.57. So really it's not that far off normal. Just have to readjust your expectations!

and happy birthday!

Re: Dropping exchange rate
 

Spot on Mallory. People quickly forget what is "normal". I've head the same comments from other people in the UK, bemoaning why the exchange rate is so bad and that their holidays cost so much more. While it's probably more noticeable right at the moment as the exchange rate swung right through normal the other way in a short period of time; but as you say, its really not that far off a parity figure.

Re: Dropping exchange rate
 

Just as a reminder, here is the historical record of "normal":

http://research.stlouisfed.org/fred2/data/EXUSUK.txt

- note that these are monthly averages, so don't reflect the daily spikes that have occurred.

I have always thought of about $1.40-$1.60 as the "norm", but interestingly, until recently it hasn't been that low since 2003.

Re: Dropping exchange rate
 

yeah, the year DH arrived and the process of paying back to the UK started for us. :)

Re: Dropping exchange rate
 

It's good for me and my upcoming trip to Old Blighty though :D

Re: Dropping exchange rate
 

Good for me too, being as all our cash is this side :)

Re: Dropping exchange rate
 

mixed feelings for me....we moved most of our cash over in 2007 and at a $1.94. At the time was actually annoyed we didn't get over $2 but still know we did very well.

On the downside we still have cash in the UK which is dwindling fast in $ terms and of course there's also pension pots over there which are getting double hit from the market & FX rates

Re: Dropping exchange rate
 

It's brilliant for me as I have a credit card to pay off over there from when I first emigrated :thumbsup:

Re: Dropping exchange rate
 

Good for you trying to pay your debt off. :thumbsup:

Re: Dropping exchange rate
 

That is something I don't understand, walking away from debt because you move to a different country. You spent the money on whatever, you have an obligation, or maybe I'm just old fashioned. :confused:

Re: Dropping exchange rate
 

I don't agree with people walking away from their debts either Cindy...but in this case SpoogleDrummer is paying his debt off...he's not running away from it.

Re: Dropping exchange rate
 

I know, I caught that, :) It just made me think about posts I've seen in the past to that effect.

Re: Dropping exchange rate
 

I don't understand "parity". On what is parity based? The exchange rate is usually driven by interest rates, people buy the currency, and drive up the price, when they want to invest in the county's bonds. That isn't working right now, since our interest rate is near zero.