How Low will the €uro go?

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montgolfiere
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How Low will the €uro go?

Post by montgolfiere » Wed 11 Mar 2015 06:51

Just changed some ££££'s on Transferwise this morning and the rate is 141.5 €€€€'s !!!
What's the odds on it reaching 1.50 soon???

martyn94
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Post by martyn94 » Wed 11 Mar 2015 09:39

Probably not high, but predicting forward currency rates is a mug's game. My concern is that it will go back down again just when I've got used to having the extra money.

monsans
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euro/sterling

Post by monsans » Wed 11 Mar 2015 10:44

It's well for some!!!!

GrahamC
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Post by GrahamC » Wed 11 Mar 2015 10:57

Because we're buying a house I've been watching the Euro closely for several months and avidly reading the fiancial sections every day. Some analysts think it will eventually settle back at 1.6.

QE and Grexit are the main influencing factors.

montgolfiere
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Post by montgolfiere » Wed 11 Mar 2015 11:29

martyn94 wrote:Probably not high, but predicting forward currency rates is a mug's game. My concern is that it will go back down again just when I've got used to having the extra money.
I agree, relying on a forward prediction would be crazy....however, i am just hedging my bets by changing a little as the rate increases!!!

Smiley G
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Post by Smiley G » Wed 11 Mar 2015 17:05

Don't forget that a strong £ is a double-edged sword. If you receive your income/pensions in £Sterling, a high FX figure will enhance your income in €Euros, possibly resulting in a higher French Tax Band.
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Allan
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Post by Allan » Thu 12 Mar 2015 01:55

Smiley G wrote:Don't forget that a strong £ is a double-edged sword. If you receive your income/pensions in £Sterling, a high FX figure will enhance your income in €Euros, possibly resulting in a higher French Tax Band.
I don't follow your reasoning, you may have to pay more tax but you will have more euros to pay it with.

Using your logic a cut in pension would be good because you would pay less tax on it.

Smiley G
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Post by Smiley G » Thu 12 Mar 2015 07:34

Allan, if the rate is high in 2015 and then drops later in the year (change in U.K. Government) your tax is levied in 2016 (for 2015 income) and will have to be paid out of that reduced income.
I appreciate you could "put some of the enhanced income away" but in practical terms people don't tend to do this.
I think the article I studied was from some specialist expat financial advisors.
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Allan
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Post by Allan » Thu 12 Mar 2015 07:51

Smiley G wrote:Allan, if the rate is high in 2015 and then drops later in the year (change in U.K. Government) your tax is levied in 2016 (for 2015 income) and will have to be paid out of that reduced income.
I appreciate you could "put some of the enhanced income away" but in practical terms people don't tend to do this.
I think the article I studied was from some specialist expat financial advisors.
If I have understood your point correctly then conversely, if you are paying 2014's tax in euro out of this years income in GBP then the tax will now cost you less. But next year it could be the other way around

I can't see disadvantages to a good exchange rate for people who's income is in GBP. unless the are selling up and moving back to the UK

Smiley G
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Post by Smiley G » Thu 12 Mar 2015 15:10

I perhaps should have pointed out in my original post that it would be prudent in times of plenty to put some additional money aside for the following year, especially if you think that your tax band might change because of enhanced income (by way of high FX rates).
Allan, I agree that the principal disadvantage of a strong £ against the € is the scenario of someone selling up to return to the U.K. Currently 1€ buys £0.7180, so 100,000€ would only "buy" about £71,800 !
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