Re: Exchange Rate Today
 

5 years ago I swapped all my £ for $ at 1.69. I have been sitting on a big paper loss since then. At last it has swung the other way so I am a happy bunny :thumbup:

Re: Exchange Rate Today
 

I change my UK pension into $$ every month. So after the share wipe-out my monthly income is now devalued by 20%. All we need now is for the price of beer to go up and I'm screwed. :)

Re: Exchange Rate Today
 

I swapped our GBP to USD over in late Feb/March (moved here in Jan). We did it in stages.

Lowest we got was $1.92. Highest we got was $2.10.

Feeling rather smug right now :thumbup:

Re: Exchange Rate Today
 

Oh, whoopy-do! :sneaky: :p

Re: Exchange Rate Today
 

Now at $1.58. As I've said tbefore, the volatility is quite remarkable.

So the £ is finally down to its probaable purchasing power parity. I thought it would take many many years longer for that to happen.

Re: Exchange Rate Today
 

I feel ya, it must be karma for all the glee I had at the 'pay raises' every month. :(

Re: Exchange Rate Today
 

I didn't necessarily think many years but I would've thought it would have been a bit longer than this wild two week period....even one week period maybe - this week has been crazy.

Re: Exchange Rate Today
 

This has been wild. I'm wondering if the OPEC price reduction might stabilize the dollar over the next few months, or if there is more to go given the UK economy. Simply no idea what comes next....

Re: Exchange Rate Today
 

Robert Peston has a good piece on this. To me it all makes a bit more sense.

http://www.bbc.co.uk/blogs/thereport...g_shunned.html

Re: Exchange Rate Today
 

Not a bad read at all! If it is an accurate assessment, we have a very long road ahead.

Re: Exchange Rate Today
 

great...that's more like it!

Re: Exchange Rate Today
 

I've just noticed this story in the NYT: http://www.nytimes.com/2008/10/25/bu...th&oref=slogin

While it would be aimed at helping other currencies, I wonder whether such actions might have a side-effect of bolstering the pound?

Re: Exchange Rate Today
 

I expect it would.

Re: Exchange Rate Today
 

Why don't you get a fixed rate contract. There are at least 2 companies that do them for periods from 6 to 24 months.

Like you I have a monthly UK pension it is on a locked in rate of $1.955 until June 2009. The real advantage is I know what I will receive each month for the life of the contract.

HiFX there are no charges, MoneyCorp the rate is a bit higher but they charge £4 a month transfer fee.

Re: Exchange Rate Today
 

It may slow down the rise but it seldom works. The USD and Japanese Yen are rising primarily due to the unwinding of carry trades (international hedge funds and investors selling off foreign assets that were purchased by loans that were made primarily in USD or Yen denominations and now margin calls or redemptions are occurring) causing the dollar and yen to be purchased to pay off the loans. Loans were made in both of those currencies due to the cheap interest rates over the years to purchase securities in markets around the world. The yen has strengthened even more than the USD because Japanese investors have invested more heavily in foreign markets over the past years and are now repatriating the currency.

A large amount of currency is also flowing into the USD for flight to safety reasons so until the financial systems and markets get stable around the world (probably at least another year) the trend will probably continue. Finally it is expected that the UK and Europe will be reducing interest rates in the near future causing further pressure on the pound and euro.

Central banks are hesitant to purchase foreign currencies at inflated prices since propping up currencies seldom works and the governments usually take large loses when the currencies eventually continues to fall. If the banks prop up the currencies, the governments instead of the investors take the loses.

Just my two cents.