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At the moment it is for me a little terrifying.

The trend seems relentless. Every day, the Euro appreciates (possibly too much - the Eurozone has its big problems, they just don't make it to the news with so much incompetence on display). The trend since April is just incredible. Markets seem to be pricing in the worst scenario.

Which is not a guaranteed outcome, and indeed faced with a worst case the UK may yet find a way out (EEA, or even second referendum). But a year from now this would not have happened, so it may be the nadir for Sterling, with a guaranteed full catastrophe priced in and maybe an excess in that, as currency depreciations tend to first overshoot (in fact they must, otherwise there would be an opportunity for arbitrage).
And a year from now is when I must leave. School years end in the summer, so it cannot be done before, nor later without risking being after a cliff-edge exit.

At this rate, I am getting quite concerned with how little our savings will be worth in euros when we have to convert them - to have a place to live.

Of course, if the cliff edge happens, then I should start to worry about how much my pension pot will be worth, but that will be a problem for when we are over 55, so less immediate.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Aug 23rd, 2017 at 08:18:35 AM EST
[ Parent ]
Cyrille, in 2008 when the housing crisis blew up the Euro was at 1.55 to the Dollar; today it is at 1.17. The Euro has been an undervalued currency these past years as the inability to address the sovereign debt crisis and an expectation of a collapse of the EU combined to suppress exchange rates. Now, with European economies back on a growth path and sovereign debt no longer under immediate threat, the Euro has to regain its value - even if partially. Otherwise a large trade surplus would develop, which for an economy this large is not really possible for long.

On a personal note, you should move your savings into another currency as soon as possible. And since you are leaving the UK you should seek to cash in your retirement policy or whatever other retirement instruments you may have. The Sterling is becoming a toxic currency, there is no telling where it can end.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Wed Aug 23rd, 2017 at 12:03:24 PM EST
[ Parent ]
GBP isn't toxic. GBP has been the most grossly overvalued currency on the planet for 30 years. Its price is reverting to the mean --within the IMF imperial basket of so-called reserve currencies.

Diversity is the key to economic and political evolution.
by Cat on Wed Aug 23rd, 2017 at 12:10:50 PM EST
[ Parent ]
You show the comparison to the dollar - but relative to the pound the euro is now approaching its highest point ever, which was overvalued (and did not last long at all).

So we are not in "partially regaining its value" territory, we are in having got there and looking like it's going to keep moving.

As for our savings they are of three kinds:
-Our flat, which we cannot cash until we find a buyer (and though it is for sale, it is unlikely that it will be sold many months before we can move);
-Our ltd company, which cannot be wound up until after it ceases trading, so even if we were to find a way for my wife to charge differently after she returns from maternity leave, we could not trigger the process before December, and it takes at least 6 months;
-Our pension pots, which by law can no longer be moved to France until we reach 55, which is many (many - I insist ;-) ) years later.

So we are pretty much stuck with Sterling for the time being.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Aug 23rd, 2017 at 12:21:47 PM EST
[ Parent ]
I've been at it for about four years, casually, meaning posting groups of pair rates at calculatedrisk weekly. I started to do so in rhetorical defense of EUR and RMB for which the nativist' contempt had no bottom known to Anglo-merican business press best practice in exploiting the ignorance of the common "man".

My source was always finance.yahoo! close.

(It kinda sux yahoo! abandoned permalink to pairs, but I really appreciate the site recent re-design from ratio to identity notation. e.g. 1 GBP = x RMB. It was annoying to me to annotate ratio with a sentence, "One pound buys x euros" or "One yuan buys x US dollars.")

In short, USD:EUR has been trading between 0.89 and 0.98 in the period. Low volatility in my book which is "The Purpose of Currency Manipulation by Central Banks is to Eliminate Large Margin Profit Taking Opportunities".


Diversity is the key to economic and political evolution.

by Cat on Wed Aug 23rd, 2017 at 01:14:50 PM EST
[ Parent ]
OMFG. I'll never forget the jackass who insisted "USD/EUR".

Diversity is the key to economic and political evolution.
by Cat on Wed Aug 23rd, 2017 at 01:16:57 PM EST
[ Parent ]
"Markets" are pricing UK third-country status viz. EU. One day after 29 March 2019 the UK gov't will be free to negotiate a bi-lateral treaty with the EU and devalue further value of GBP viz. all other um fungible currencies.

That's the best scenario, isn't it?

Diversity is the key to economic and political evolution.

by Cat on Wed Aug 23rd, 2017 at 12:05:07 PM EST
[ Parent ]

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