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Euro Vs Gbp?

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Hi all,

After STR'ing I've banked a sizable deposit for when house prices eventually get back to realistic levels. With inflation on the move, I'm now getting concerned that I'll see the value of my savings begin to dwindle.

I've researched a few offshore savings accounts offered by my bank, one being a Euro savings account held in the Isle of Man. The returns on interest are pretty poor due to the low ECB base rates, however I'm thinking it may be worth putting in at least some of my savings to try and hedge against a falling pound.

My question to you all is do you think this could be a worth while move? I know Italy are currently thinking about exiting the Euro, due to increased costs of living, and this could dent confidence in the Euro.

I personally think that the Euro has more stability than the pound at present, and as it becomes more obvious that the UK is heading for recession, having at least some of my savings in Euro's would be a wise move?

Any advice greatfully received.

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Guest Riser

I now hold some gold safe in an allocated account and hope for the following:

Pound to fall to around $1.60 against the dollar in the next 6 months causing a 10% increase £Gold

Then early next year the Dollar should start to fall, initially making little difference to £Gold but then I hope US investors will buy gold as the Dow tanks and oil price rises indirectly increase £Gold as a hedge against the resulting inflation.

I don't now expect interest rates to go up much in the UK until the end of next year by which time inflation will be out of control and house prices will be falling at around -15% YOY

Could be wrong but I have money on it B)

Edited by Riser

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Thanks for the advice, but do you have any specific ideas about how the pound will fair against the euro?

It's the easiest currency I can move into using my current bank acct.

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I think riser is on the money here.

I'm very bearish on sterling vs euro,also US$ vs euro.

I suppose you could put a chunk of your STR into euro now and wait for the sh1t to hit the fan.

next year as US props start falling I think we'll be in for another bout of dollar weakness,but UK props will fall faster IMO,so sterling will weaken more quickly.

similar story with yen,but my gut feeling is that's more of a growth play rather than a lack of strength.

the only point I don't agree with riser on is I don't think the dow will tank(yet)....I'm saving that call until china is on the cusp of becoming an economic superpower,complete with good legal,financial systems in place....which both have some way to go yet.(2008 maybe,beijing olympics,also a us presidential year which are usually bullish for stocks anyway)

Edited by oracle

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