Euros to Pounds : All You Need To Know!
Hello and welcome to another of my currency sites, which I hope will
give you
all the information you need
about all the various aspects of exchanging euros to pounds, both as an investor and also as a trader. If you are looking for
the current rates, below is a currency converter which I hope you will
find useful. The rates are updated several times a day, so they will
always be up to date.
In addition to providing an overview of currency exchange I have also included on this site, information for you about buying assets overseas, and some of the issues you will need to be aware of when buying and selling, and also renting.
As an overseas owner myself, it can be quite daunting, dealing with both the issues of understanding local regulations, along with the complications of the currency and how rates change over time. To manage your investments well, even if it just a second home for holidays and pleasure, is not easy - I hope this site will help explain in a little more detail, some of the issues you need to consider before jumping in!
Euros to Pounds : Before You Buy Your Property Or Yacht
The
Euro has been around for nearly 10 years, and in that time more than
half of the current 25 EU member states have adopted it as their
principle currency. The UK remains the major European nation, which to
date has resisted the pressure to ditch the pound and accept its fate
along with it's fellow Europeans. The Euro was originally introduced as
an accounting currency in 1999 and launched with physical notes and
coins on the 1st January 2002 having replaced the former ECU ( European
Currency Unit) at an exchange rate of 1:1. Latest estimates suggest that
the Euro has more physical currency in circulation at present than the
US dollar, which it has pushed into second place in the space of 5
years!
When the Euro was originally launched in 1999, the exchange rate with the pound was approximately 0.66, meaning one Euro was worth 66p. By 2001 this rate had fallen to 58p and at the launch of the currency on 1st January 2002 the rate was 0.61, or 61p to the pound. Until recently the currency has fluctuated between 0.65 and 0.68 but in the last few months the exchange rate has increased dramatically with increasing weakness in the pound, making 1 Euro worth 75p.
If you are a currency trader, you will no doubt be very familiar with the above chart. For non traders these charts can be confusing, so let me explain briefly. As I'm sure you know, all currencies are quoted in 'pairs' against one another. In this case we are looking at the Euro to UK pound pair, and how this will affect your euros to pounds conversion. The chart above goes back to January 2003, and each bar represents one month of price movement - if the Euro strengthened over the month against the UK pound then it is a green bar, and if it weakened then it is a red bar. As you can see the exchange rate was fairly stable between 2004 and 2007, but in the last few months prices have 'broken out' of their trading range as the pound has 'weakened' further against the Euro.
Now if you are a UK resident and buying Euro assets using pounds, this effectively means you will have to pay more, as each Euro is going to cost you 75.5p rather than the 69.5p of a few months ago. So if you were buying a yacht or apartment at 200,000 euros, this would cost you an additional 6p for every Euro, or £ 12,000 pounds - quite a difference in only 4 months!
Now if you are UK resident but already hold assets in euros, then this is good news for you, as your 200,000 Euro asset would have increased in value by £12,000 . In 4 months your asset has increased by £12,000, by doing nothing! ( this is without any market increase in property value which may also have happened) - this is what makes both trading and investing such an interesting, but speculative business!. As a trader I simply buy or sell depending on which way I think the market is going, but I can always close my positions quickly, and exit the market. As a property or asset investor or owner, this is not the case, so you need to understand about the strength or weakness of one currency against another, before going ahead.
For those living in Europe, buying assets in the UK is good news at the moment as the pound is so weak against the Euro, and showing further signs of weakness to come!
My personal view of the euros to pounds rate, is that it will now continue in this direction for a little while to come, with increasing weakness in the pound, and strength in the Euro. If you are already holding Euro assets, I would start to think about selling, or simply enjoy the fact that your holiday home, or yacht is increasing in value. For buyers, I would suggest making your buying decision sooner rather than later.
Now, in addition to considering the capital costs, and their appreciation and depreciation, we need to look at how the euros to pounds exchange rate will affect us if we have an mortgage.