Currencies etc

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This topic contains 34 replies, has 15 voices, and was last updated by Profile photo of Anonymous Anonymous 7 years, 12 months ago.

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  • #54398
    Profile photo of angie
    angie
    Spectator

    The Pound has been in freefall recently against the Dollar which appears to be back in favour again and is still the Reserve Currency for many countries, it’s also difficult to see which other currency would take it’s place. Sterling has also lost ground this week against the Euro, but I expect the Euro to drop next year as so many Euro countries are in trouble and some want out.

    So, investors are favouring the Dollar and Gold whilst stock markets and property prices universally plummet, it will be interesting to see to what levels it all pans out.

    Can’t help thinking that despite rate cuts, UK property is still very overpriced like Spain’s.

    Just my take on things, but any other ideas from you? 😉

  • #86824
    Profile photo of Anonymous
    Anonymous
    Participant

    “Can’t help thinking that despite rate cuts, UK property is still very overpriced like Spain’s.”

    Rate cuts are not being passed to the public, they are used by banks to screw the saving
    accounts by lowering the saving rates.

    UK property is way overvalued at about 5 times the average income when in normal condition this should be 3.5 times the average income. So a 30% decrease is expected even if the Depression does not start. If it starts and the number of unempl;oyed people skyrockets then God help us. The price of property would be our last worry.

    In what concerns the Spanish property, they are following rules which I cannot understand. 😛

  • #86884
    Profile photo of angie
    angie
    Spectator

    I agree we got back to how it was, 3.5 times earnings should be the norm for mortgage lending, 5-6 times was absurd, suicidal.

  • #86885
    Profile photo of Anonymous
    Anonymous
    Participant

    3.5 times earning makes sense. However one should keep in mind that multiple was applicable when the interest rates were 12% to 15%.

  • #86888
    Profile photo of katy
    katy
    Spectator

    We were getting 15% on our savings when we first moved here…we thought we had it made 😕

  • #86890
    Profile photo of Anonymous
    Anonymous
    Participant

    Katy, I don’t know when you moved but I can assume this was around/before Spain Joined the EU.

    I am sure that you thought that you had it made, Free sunshine, Cheap tinto. £ to Peseta around 250-265. What you perhaps overlooked in the merriment, was that Spanish inflation was running around 18%.

  • #86892
    Profile photo of katy
    katy
    Spectator

    Life was so good it took a while to notice the inflation rate 😆 Probably when we started to get around 7% interest!

  • #86925
    Profile photo of angie
    angie
    Spectator

    In today’s S. Times Business section ‘Pound Will Keep Falling’.

    ‘Stirling will continue to slide against the Dollar as long as financial turbulence persists, analysts say, as international investors dump the Pound and Euro’

    UK interest rates are seen by currency dealers as having further to fall than those of other countries, further weakening Sterling.

  • #86929
    Profile photo of Anonymous
    Anonymous
    Participant

    Angie:

    A falling Pound will be bad news for inflation.

    We may be cutting interest rates hard to stave off a slump, but this could return in two years time as raging inflation.

    We should be increasing interest rates, not cutting them. Low interest rates got us into this mess in the first place.

    I note that some lenders are not passing on the cuts to even those on Tracker Mortgages! Fix now for 10 years at 6%. We may well be looking at 12% in a few years. 😕

  • #86930
    Profile photo of angie
    angie
    Spectator

    You’re right maximus about inflation rising if interest rates are cut, the BOE MPC have been concerned about inflation for months, only 1 member voting for cuts. However the BOE have clearly been pressurised into the sudden cut with more to come, from Gov’t and Businesses because of the Global recession.

    They can’t get the balance right it seems, however if Sterling continues to weaken it will stop people buying property in Eurozone countries as well as decimate UK pensions for people retired there who are already feeling the pinch.

  • #87253
    Profile photo of angie
    angie
    Spectator

    In no time at all the Dollar has become King again with Sterling being the weakling. IMO though next year the Euro will become one of the weakest currencies with Sterling still pretty weak too.

    House prices will probably fall further as a result in both Spain and the UK, there are some desperate Developers now in the UK too, discounting by 30% plus.

  • #87255
    Profile photo of katy
    katy
    Spectator

    Always the same, USA can be in recession and a few months later is out of it. Lots of smirking when the US fell of the rails but the old saying still applies…America sneezes and Europe catches a cold!

  • #87259
    Profile photo of Anonymous
    Anonymous
    Participant

    @angie wrote:

    In no time at all the Dollar has become King again with Sterling being the weakling. IMO though next year the Euro will become one of the weakest currencies with Sterling still pretty weak too.

    House prices will probably fall further as a result in both Spain and the UK, there are some desperate Developers now in the UK too, discounting by 30% plus.

    It really is the last opportunity to get rid of dollars at a good rate.
    After the 4 November election the dollar with be thrashed.

  • #87261
    Profile photo of katy
    katy
    Spectator

    Hope you are correct…I need to buy some fairly soon 🙂

  • #87262
    Profile photo of Paul
    Paul
    Participant

    Not sure I agree with you flosmichael but it’s just my opinion.

    Assuming Obama gets in, I think there will be a mood of optimism in the States for several months at least, and that mood, along with Sterling’s continued weakness because of the dire UK economy should keep the Dollar strong against both Sterling and the Euro for some while, unless further bad news comes out of the States or World in general.

    I think the rate for Sterling/Dollar though could fluctuate wildly from 1.40-1.80 or so, IMO.

  • #87475
    Profile photo of Paul
    Paul
    Participant

    The BOE has just slashed UK interest rates by 1.5%, which, whilst needed, could be an indication that the UK economy is in a much worse situation than most people think, maybe a touch of panic, or reality.

    It will be interesting to see how Sterling could weaken a lot against the Euro and Dollar. If it does, then buying property in Eurozone will be more expensive, and living there for retirees etc will also be more expensive.

    How much could this move impact on an already weak property market?

  • #87479
    Profile photo of Anonymous
    Anonymous
    Participant

    UK Base rates being cut by 1.5% according to my friend in the uk that is certainly not going to help the currency

  • #87487
    Profile photo of Anonymous
    Anonymous
    Participant

    The tourist exchange rate in M&S and papers today is 1.17 euros to £1. The lowest I have ever seen. 🙁

  • #87490
    Profile photo of Anonymous
    Anonymous
    Participant

    08-09 hrs Uk

    1 GBP = 1.22193 interbank

    A record low since the euro came into being

  • #87515
    Profile photo of Anonymous
    Anonymous
    Participant

    makes my 1.225 from HIFX look like a good deal

  • #87517
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Nick

    Not bad

    Its been up to 1.27 to day, on the thinking that UK PLC will come out of resession quicker due to deciisive action, where by Euro PLC is still in denial only cutting rates by 50 points

    Slumbering at 1. 23 over the weekend

    SV

  • #87762
    Profile photo of Anonymous
    Anonymous
    Participant

    This is will have a huge impact on Spanish Property sales to any remaining brits who want, need to buy.

    21-16 GMT Thursday 13th November

    1 GBP =1.16 euro, its in free fall

  • #87769
    Profile photo of Anonymous
    Anonymous
    Participant

    The Christmas Markets that are a big attraction to UK people will suffer , I’m sure. Also, maybe the ski-ing fraternity will stay away from the Alps. The Euro is way too expensive.

  • #87795
    Profile photo of Paul
    Paul
    Participant

    The current exchange rate is another example of ‘why not’ to buy property in Spain and the rest of the Eurozone.

    Any purchase will cost aprox. another 15-20% in Sterling terms.

    When the Euro falls as it will one day against Sterling, there will be a ‘double whammy’ if you need to sell your eurozone property to change back to Sterling. In total the losses could be 40% plus just on exchange rates and buying/selling costs, irrespective of falling markets, it will wipe some people out of their equity.

    Unless you really need to buy in Spain, DON’T, it’s potentially financial suicide.

    The market in France is also in a worse state than the UK, it’s all but dead there too. ❗

  • #87806
    Profile photo of Anonymous
    Anonymous
    Participant

    The problem with property purchase in the UK was the high loan to values that were on offer, coupled to high muliples. I can understand giving a newly qualified doctor on say £30,000 p/a 5 x salary and 125% LTV because he/she will be working a 70 hour week and won’t have any spare time to go out and spend. Also they will be earning over £100,000 in 5 years time so they are a fairly safe bet.

    It’s the ordinary working folk that worry me, they save up very little and then ask for a lot, if they can’t save a reasonable deposit how are they going to service their mortgage? They then go out and furnish their home on interest free credit, buy their car on interest free credit, go on holidays, eat out etc on their credit cards and keep switching to zero rates whilst only making the minimum monthly payment. But their home goes up in value so they remortgage at a good rate and strip out as much equity as they can to pay off their credit cards, they then start racking up debt all over again.

    The trouble is that all good things usually come to an end, they will now have to start living in the real world, where you pay for things.

  • #87813
    Profile photo of katy
    katy
    Spectator

    I did read an article recently that stated most of the foreclosures in the UK are through credit card debt not just the mortgage.

    Would think the only way for anyone who wants to move to Spain would be to exchange or part exchange. Or, perhaps do a deal with the seller to adjust the price to reflect GBP rate changes (if they are returning to the UK).

  • #87827
    Profile photo of Anonymous
    Anonymous
    Participant

    @paul wrote:

    The current exchange rate is another example of ‘why not’ to buy property in Spain and the rest of the Eurozone.

    Any purchase will cost aprox. another 15-20% in Sterling terms.

    When the Euro falls as it will one day against Sterling, there will be a ‘double whammy’ if you need to sell your eurozone property to change back to Sterling. In total the losses could be 40% plus just on exchange rates and buying/selling costs, irrespective of falling markets, it will wipe some people out of their equity.

    Unless you really need to buy in Spain, DON’T, it’s potentially financial suicide.

    The market in France is also in a worse state than the UK, it’s all but dead there too. ❗

    I’m gradually coming around to your school of thought. As a previous poster said, the vastly reducing Spanish property prices equate to the same as when they were expensive and the euro was worth 65 pence.

    The trouble is that the Euro is not strong, it’s the pound that is weak. It only makes any sense now to value a currency against the dollar, the US started this financial disaster but it won’t be them who pay for it. Is Spain in denial about the severity of the global meltdown? They have lost the Germans because of taxation reasons, they are losing the Brits because we are scared to death of what might still be lurking in the cupboard. They can’t devalue their currency, because they haven’t got one to devalue. How long will it take for the first euro member to say enough is enough, let’s go back to how it was, with us being in charge of our own currency?

    My guess (and it is only a guess) is that the pound will start to strengthen against the euro and further weaken against the dollar. Spanish property prices will not recover quickly because of over supply, there might be some real bargains out there next year, but will we have the funds to buy? We were going to sell a family owned investment property to fund our Spanish property purchase but a local agent, who I know well, advised me not to waste my time.

  • #87828
    Profile photo of Anonymous
    Anonymous
    Participant

    Agree with whats being said in general

    However what about the one that bought a very good value property in say 1999 at 1 Euro 50
    Cant have it both ways 😉

    Just Frank 8)

  • #87854
    Profile photo of Anonymous
    Anonymous
    Participant

    1 GBP= 1.11 € 😯 😯

  • #87868
    Profile photo of Anonymous
    Anonymous
    Participant

    Clair where do you get your prices 1.15 at 4x currencies.

  • #87882
    Profile photo of Anonymous
    Anonymous
    Participant

    I read it in the financial pages of the newspapers.

  • #88502
    Profile photo of Anonymous
    Anonymous
    Participant

    Now just above 1.14

    Some seem to think the euro is a good time currency, (as reported in some quarters). I am sure the books in Euroland look better than they actually are. House price still rising in Spain (!!!!), and all the other corrupt reporting. Mirror that across all the Med countries. Riots in Greece as a blacklash against corrupt society. Probably a 20% reduction in tourism facing Spain next year added to 20% reduction in GDP from building. Germany in a more severe recession that expected…….

    …..but the pound still falls.

    Are we waiting for the anniversiary party to finish on the 1 Jan and then reality hits?

  • #88504
    Profile photo of Anonymous
    Anonymous
    Participant

    http://news.bbc.co.uk/1/hi/business/7775191.stm

    BBC reports £ is now sinking fast against the € – under €1.14 at one stage today!

  • #88505
    Profile photo of katy
    katy
    Spectator

    Not suprising when they are talking about zero interest rate!

  • #88550
    Profile photo of Anonymous
    Anonymous
    Participant

    Have just looked at the live forex chart – and it’s touched 90p to the euro tonight.
    Getting close to parity – soon the pound to the euro will be a little hop over the fence.
    Certainly expat pensioners are getting hammered if they only have their British pensions.

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