LG John

I've just been speaking to a friend that has reason to believe that the dollar may recover significantly against the pound (and other currencies) in the coming months with some believing that you'll only get $1.5 to every £1 within a few months. Does anyone have any more information regarding these speculations or an opinion. Obviously given that I work in $$ a recovery in the exchange rate like that would be simply awesome.

At the moment I expect to earn on average around $5000-6000 per month or around £2500-£3000 as the exchange rate has been until recently. If it clawed back to say £0.65-£1 then I'd effectively earn £3250-£3900 for the same work

TelBoy

If you can't hedge your exposure, does it actually matter?

But yes, lots of people expecting the $ to strengthen further as you say, personally i'd be surprised if it got to 1.50 but that does seem to be the psychological target for many, so you never know.

LG John

Forgive me but I don't understand that term. I'm guessing you mean 'if I'm not investing low, looking to gain then pulling out when high' then why worry about it.

Any change in the exchange rates affects me enormously. First of all I have a lump sum of $$$'s sitting in a poker account so if the $ strengthens against the £ I make a gain (i.e. my money is worth more).

Furthermore all of my earnings per month are in $$$'s and all of my expenses are in £££'s. I have to convert $ to £ every month to pay bills, buy food, etc. If I bank $3500 at 0.50 then I effectively pull £1750 from my business that month. If the following month I bank $3500 at 0.60 then despite playing the same levels for the same hours and making the same amount of money I've 'earned' an extra £350.

Hope that makes sense and you can see how important a recovery would be for me. I remember playing poker a few years ago when it was at 0.65 so getting around 0.5 for the last year or so has sucked ***!

TelBoy

Yes i fully uderstand how it's important, but unless you can start trading forward rate agreements, you'll just have to accept the prevailing rate at the time, no? If it's going to affect whether you play more now or later, then yes, ok, hold off for a bit as your winnings are likely to be worth more in a few months' time than they are now.

Luan Pra bang

When is this change expected to start I am going to new york in two weeks would it be worth changing now to save a few pounds ?

TelBoy

It's expected to start about four months ago!! You might save a few quid if you buy your $ today, yes, but on the amount you're probably talking about, the difference isn't going to be earth shattering to be honest.

LG John

This is true, I'm simply at the mercy of the exchange rate as it is. When the $ get strong I when it gets weak I

On the basis it looks to be gaining strength in the near future its good for me

Gordo

hedging like this merely fixes the exchange rate for a period - for which there's a cost - i.e. putting a cap on both your downside and upside. For Saxoboy it would be a complex and expensive way to go about things - it's more appropriate for businesses that want to firm up costs / revenues matched to co-terminous contracts. For individuals it's of much less use unless you're talking large amounts.

That said, you can make a big difference related to how you do your monthly exchange - banks etc are shockers on their exchange rates and offer little flexibility. Saxoboy, if you don't already it's worth looking at TTT moneycorp or similar who can provide you better exchange rates for you to manage your money.

Gordo

Freelance Badger

If it does happen that would be great as I work for quite a few people in the USA and they pay in dollars.....