Exchange rate & Brexit impact

Well, it would appear that today’s interest rate increase to 0.75% has helped to lift the Pound slightly against the Euro - although it is still dawdling along below 1.13.

Reading the reports on much of what may happen to the exchange rate will depend on the Brexit deal and they feel that the interest rate rise will not have a lasting effect. They speculate that, should the UK obtain a satisfactory deal with the EU, then the rate could climb to close to 1.20 next year.

What a dilemma!! We are planning our house purchase for October this year - possibly just about the worst time as it stands for the exchange rate. As I am cashing in a large proportion of my SIPP pension to fund this, the timing is going to be important to minimize losses.

I can feel a frank discussion coming on with my in-laws about timing this purchase. Pulling my SIPP early will cost me both now and in the future. However, delaying the purchase in the hope that the exchange rate improves may be a fallacy as the UK may crash out with no deal and the rate could be worse than parity.

Decisions decisions…

I am in a similar position. Though its a few years yet until I can withdraw from my SIPP. The increase in interest rate seems to have had very little impact as you say.

If we do anything later this year/ early next we would likely rent first - if rates moved to parity or worse going forward it would likely postpone or cancel our plans.

I would agree that a “good deal” would deliver more favourable conditions for a better exchange rate. Perhaps only months to wait but you would have completed before then.

Markets like certainty but not the certainty a bad deal might bring with it - make up your own mind what that might look like.

I feel your pain :frowning:

You are certainly between a rock and a hard place Carl.
Not ideal I know, but is it possible to delay the purchase for a little while ?
Is there still the 3 months compromis de vente between family members ?
A really difficult decision to have to make…I don’t envy you !

I’m not a gambler… I like to know where I stand… so, for me…

I would organize the money for the purchase now, at a given rate, and live with the consequences :zipper_mouth_face:

The thought of the indecision/worry… and quite possibly an even worse financial position a few months down the line…that would do my head in. :sweat::unamused:

However, if it is really not possible to do it NOW … ie at a known rate… then the wait would just have to be endured… but I would be murder to live with in the meantime… and if it all went badly… mmmm :stuck_out_tongue_winking_eye::roll_eyes::sweat:

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Sympathize Carl :thinking:

There lies your solution carlmt.

We had a similar problem last year, waiting for a spike. Then Theresa May called an election and we moved all our money the next day because for once a politician actually made a difference to us. :joy: we were lucky because the rate soon dropped again.

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Anyone care to comment on current exchange rate? We transferred some yesterday but despite seeing 1.12 ish FCcurrency exchange only gave us 1.10. are they no longer competitive, is it time to look for another FX company?

We try to avoid them all John and make ‘big payments’ via my UK Master Card, (where we pay fees too).
But, if tomorrow, the rate goes to 1.20, (unlikely), I will be emptying my UK account, via the most favourable FX Comp’ :slightly_smiling_face:

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City Forex are showing a rate of 1 to 1.1067

Transferwise are showing 1 to 1.1235 with fees of £390 to transfer £120000.

Not quite apples with apples but close.

NB - the rate on Transferwise has just changed to 1 to 1.1232…updated by the minute it seems!

Reading the blurb from Transferwise, it would seem they follow the mid-market rate and that is what you will get - with a fee on top for the privilege.

I, myself, prefer this as the fee is transparent.

I have found Transferwise to be the best for me …

If a little high, some FX have a flat fee, we have had rates about 0.05 under the commercial rate with a €3 fee.

Define “commercial rate”

If you mean 5c under the market rate then that is about 4.5%, Transferwise charge 0.3% of the transaction value.

Edit - slight correction the GBP->EUR fee is 0.3%

The commercial interbank rate, if the commercial rate was 1.125 we would have got 1.120 but paid a €3 transfer fee irrespective of the size of the transfer.

Which is the same as the mid market rate so if you were offered 0.5c less than that you were still paying more than Transferwise would charge.

Eg assuming the mid-market rate is 1.20€ to the £ - you are going to get 1.195€

Suppose you transfer £100,000 - you get 100,000*1.195 - 3 or 119497€

With Transferwise you get £100,000 * 1.2 - 0.3% - 0.8 = 119639€

Which is better?

You do realise the bank pockets the difference?

Edit: helps not to be 10x out as I misread John’s rate, corrected now I think.

I agree, just thought as the rate offered yesterday by FC exchange of 1.10 could be compared to what currency wise or others were offering.

Can I recommend Revolut - transfers at the full rate with no commission.

It is a very different approach to FX but after 3 months I am very impressed indeed and far far cheaper than all of the normal FX companies.

Looks interesting

There’s an annual fee of £72 so you need to transfer about £20k per annum for it to be worthwhile on transfer fees but if you are moving that much it looks like it would be worth investigating.

There is a £4k free option with the same transfer benefits.