� against the Euro

[rov1200]

Is it likely the � will regain the exchange rate to the Euro experienced a few months ago?

[Ethel]

Nobody knows - people make and lose fortunes gambling on that very thing

[Buenchico]

As Ethel indicates, governments and banks both pay people with degrees in economics (and often with vast experience in currency dealing) to try to predict such things. Even they don't generally do much better with their predictions than the man in the street.

For what it's worth, my analysis of the current economic situation (largely based upon listening to a lot of 'experts', from around the world, on BBC World Service) is that foreign investors can currently see little reason to invest in UK government bonds (or in UK businesses). So that means that they'll not be buying sterling currency, which will push its value down against most other currencies.

At typical tourist rates, �1 currently buys you about �1.04. My guess is that, in a year's time, �1 will only buy about �0.70

Chris

[rov1200]

Thanks Chris. I think what I was getting at was the economic cycles prevalent in all countries. For instance the ecomonic cycle in Britain may be lagging or leading the rest of the Euro zone.

[sqad617]

Buenchico....that is really a gloomy forecast for the�/�.

Parity yes....but your prediction???/

Who knows?

[joggerjayne]

I agree.

Why would the � go up ?

We don't have much to export at the mo, so why would anyone need to buy �s ?

Plus, the Govt have sold off all our gold reserves, so we can't trade back any �'s.

Luckily, I keep a Euro Account, which I stocked up at a much better rate, and which I have been spending recently.

Less luckily, my last 2 trips abroad have been to Switzerland.

[Hammer]

All that stuff you've all mentioned - that's why it's already gone down and has no bearing on whether it will go down further.

The only things that will change rates are things we don't already know. Assuming that the Efficient Market Theory is true, everything already in the public domain is already priced in. So in other words, your guess is as good as anyone else's!

[legend-isgod]

well what it was a few months ago want that great.
i think the highest its been this year , tourist rate was around 112 to 113.

the pound has been artificially high against the euro for a few years now.

i know when i moved to tenerife 3 years ago the exchange rate was around 1.40


7 years ago when my mate moved here it was between 1.33 and 1,.36


today the market rate for the � against the euro is 112

and the tourist rate in tenerife is anywhere between 108 and 109


you tend to get better her than balearics or mainland spain , i can testify to that from experience.

gotta say that chris is being extremely gloomy in his predictions
the lowest the pounds ever fallen in tenerife was 0.99 and that was for 1 day.

to expect it to falll to 0.70 is very negative.


taking into account that barclays have forecast 1.09 for 3 month and 6 month forecasts
that would seem to indicate anywhere between 1.05 and 111 for tourists.


any reason youre asking rov?


btw the rates up by about 60 cents today but down by 2 euros on this time last week.
jayne a euro account can only cushion you to a certain extent.