Jump to content
House Price Crash Forum
Sign in to follow this  
mungbean

Returning To The Uk Form Aus Should I Cash In My Chips

Recommended Posts

We're returning to the U.K. after an extended period in Australia. We've saved some money up which we are planning to use as a deposit for a house in the future.

In recent times the Australian dollar has gone from being worth 45p to around 60p and this has left me in a bit of a quandary.

Do I leave the money here in Australia in a relatively high interest savings account or make the most of the current good exchange rate and change it to sterling? Anybody got any thoughts what I should do (sadly us staying here is not an option)?

Share this post


Link to post
Share on other sites

This is a pretty daft place to ask for financial advice as most contributors do not know the difference between facts and opinions. No one knows what the AUD/GBP exchenge rate will be when you need your GBP for your house deposit. It may be higher or it may be lower (despite what anyone else tells you).

If you want to punt the fx market, why not do half now and the other half when you need it. That way, you can benefit from the higher return on some of the AUD whilst protecting some of the fx risk against GBP.

Share this post


Link to post
Share on other sites

If you want to punt the fx market, why not do half now and the other half when you need it. That way, you can benefit from the higher return on some of the AUD whilst protecting some of the fx risk against GBP.

Yes, that's best advice you'll get, that's a fact! That's what I'd do in your situation anyway.

Why are you coming back now? Do you have jobs to go to?

Edited by council dweller

Share this post


Link to post
Share on other sites

Australia is at its most optimistic or near enough - the UK at its most pessimistic.

Swap your AUD into GBP now!

Warning: I'm not a qualified financial adviser and could known nothing about the facts governing your situation.

Share this post


Link to post
Share on other sites

This is a pretty daft place to ask for financial advice as most contributors do not know the difference between facts and opinions.

Ooh, get her!

Share this post


Link to post
Share on other sites

Australia is at its most optimistic or near enough - the UK at its most pessimistic.

Swap your AUD into GBP now!

Warning: I'm not a qualified financial adviser and could known nothing about the facts governing your situation.

See, opinions dressed up as facts!

Share this post


Link to post
Share on other sites

This is a pretty daft place to ask for financial advice as most contributors do not know the difference between facts and opinions. No one knows what the AUD/GBP exchenge rate will be when you need your GBP for your house deposit. It may be higher or it may be lower (despite what anyone else tells you).

If you want to punt the fx market, why not do half now and the other half when you need it. That way, you can benefit from the higher return on some of the AUD whilst protecting some of the fx risk against GBP.

You could get the best of both worlds. Most currency exchange companies will allow you to buy currency forward. This means you could agree to convert your Aus dollars into sterling in 12 months time, but fixing at an exchange rate. very similar to today's. This way you could continue to earn good interest on your money in Aus and also know what rate you will get when you convert in the future.

Share this post


Link to post
Share on other sites

You could get the best of both worlds. Most currency exchange companies will allow you to buy currency forward. This means you could agree to convert your Aus dollars into sterling in 12 months time, but fixing at an exchange rate. very similar to today's. This way you could continue to earn good interest on your money in Aus and also know what rate you will get when you convert in the future.

You're clearly not a forward fx trader then.

OP, ignore this post as it's garbage.

Share this post


Link to post
Share on other sites

We're returning to the U.K. after an extended period in Australia. We've saved some money up which we are planning to use as a deposit for a house in the future.

In recent times the Australian dollar has gone from being worth 45p to around 60p and this has left me in a bit of a quandary.

Do I leave the money here in Australia in a relatively high interest savings account or make the most of the current good exchange rate and change it to sterling? Anybody got any thoughts what I should do (sadly us staying here is not an option)?

Can I ask why you are returning from Aus when so many Brits are trying to get out there?

I spent a year travelling round Aus in the early 90's and loved it ,one friend on the trip is still

out there in Melbourne comes back to visit people every 3-5 years but wouldn't move back to UK if you

paid him a million dollars.

Another friend moved last year sometime to Brisbane (met a beautiful Aussie girl whilst living in London) both moved

out there , they can't wait to get back to London he's totally bored of it out there.

He misses the live music scene , people with a sense of humour etc.

Share this post


Link to post
Share on other sites

We're returning to the U.K. after an extended period in Australia. We've saved some money up which we are planning to use as a deposit for a house in the future.

In recent times the Australian dollar has gone from being worth 45p to around 60p and this has left me in a bit of a quandary.

Do I leave the money here in Australia in a relatively high interest savings account or make the most of the current good exchange rate and change it to sterling? Anybody got any thoughts what I should do (sadly us staying here is not an option)?

It is the usual what do you need and what you don't need but good to have argument.

If you are going to live in UK then you need to have enough GBP for your needs, so take that chunk out and change it.

What is left then you can decided what to do with them. GBP/AUD exchange rate average about 2.4 over the last decade (vs around 1.7 now). However, there is an interest

differential now so you need to guess how long the interest differences will persist (and you get can get 3%+ saving in UK).

Share this post


Link to post
Share on other sites

(and you get can get 3%+ saving in UK).

You could earlier in the year, but how you have to tie it up in a bond for 12 months or more now to get 3%. I've searched for a while and the best instant access savings are 2.8% (Got 3.7% in Oct 2009 for 12 months but that's ending soon).

That said, a 3% swing in the exchange rate could happen very quickly and wipe out any advantage in keeping the money in Australia.

Share this post


Link to post
Share on other sites

Well you are plainly wrong. I have used the services.

Take a look at an example here: http://www.fx-foreignexchange.com/forward-currency-contract/2009/06/01/

Try Wikipedia if you really don't know how forward fx works. It is spot plus the IR differential. Last time I looked, 12m AUDGBP was around 660 points in the middle.

Share this post


Link to post
Share on other sites

Try Wikipedia if you really don't know how forward fx works. It is spot plus the IR differential. Last time I looked, 12m AUDGBP was around 660 points in the middle.

I do indeed realise this. I stated a similar rate today's not the same rate. I know the IRs are taken into account, but it would only require sterling to weaken a little and the OP could come out on-top.

Share this post


Link to post
Share on other sites

I do indeed realise this. I stated a similar rate today's not the same rate. I know the IRs are taken into account, but it would only require sterling to weaken a little and the OP could come out on-top.

But that's just taking the same fx punt.

You said you could have the best of both worlds, earning a higher IR in AUD and then converting at a known rate into GBP. I was pointing out that this is not possible (otherwise we'd all do it). The forward fx rate will negate the IR return.

Share this post


Link to post
Share on other sites

I'm not touching this thread again, barge pole or not.

Most people's opinions on here ARE made up from facts and long-term views formulated by studying the data. Mine are, anyway.

But I agree with you, there's a hell of a lot of emotion, hearsay and "personal will / desire" expressed on here.

I don't want a response to this post... please.

Share this post


Link to post
Share on other sites

hold off till a month or two after the election

the AUS$ will tank hard when the labour mining tax and carbon trading taxes are brought to the floor (Yes i am predicting a Labour win , look at the betting odds)

Share this post


Link to post
Share on other sites

But that's just taking the same fx punt.

You said you could have the best of both worlds, earning a higher IR in AUD and then converting at a known rate into GBP. I was pointing out that this is not possible (otherwise we'd all do it). The forward fx rate will negate the IR return.

It is not really a punt, as the OP would be guaranteed the rate which he would be quoted today. He would have a guarantee, but still be in the position of having got the higher deposit rate, when compared with Sterling, if Sterling was a bit weaker in 12 months time. He would be in no worse position that doing a spot trade today, as long as his Aus dollars are earning good interest in the interim period, and would also have the benefit of higher interest in the meanwhile.

Share this post


Link to post
Share on other sites

It is not really a punt, as the OP would be guaranteed the rate which he would be quoted today. He would have a guarantee, but still be in the position of having got the higher deposit rate, when compared with Sterling, if Sterling was a bit weaker in 12 months time. He would be in no worse position that doing a spot trade today, as long as his Aus dollars are earning good interest in the interim period, and would also have the benefit of higher interest in the meanwhile.

You can't have both. If you want to trade 12m forward, the rate quoted will be around 6.6c against you to take into account the higher IR. Spot today = 1.74. 12m forward = 1.806.

Today AUD 17,400 buys you £10,000

In one year

£10,000 + 0.5% interest = £10,050

AUD 17,400 + 4.3% interest = AUD 18,150

forward rate 1.806, so AUD 18,150 buys you £10,050 in one years time.

Forward fx will not generate a return out of thin air.

If you want a one way bet, try an fx option.

Share this post


Link to post
Share on other sites

Thanks for all the advice. I agree the current exchange rate is something of an anomaly and I agree that a Labor win could adversely affect this.

Also the interest rate differential doesn’t look like it’s going to blow out any time soon with most commentators pointing to the Aus interest rate remaining about where it is in the foreseeable future.

So, after having phoned a friend and asked the audience I think I’m now gonna 'take the money Chris'.

Share this post


Link to post
Share on other sites

Thanks for all the advice. I agree the current exchange rate is something of an anomaly and I agree that a Labor win could adversely affect this.

Also the interest rate differential doesn’t look like it’s going to blow out any time soon with most commentators pointing to the Aus interest rate remaining about where it is in the foreseeable future.

So, after having phoned a friend and asked the audience I think I’m now gonna 'take the money Chris'.

Good for you! Wise decision. Hope you find somewhere nice to live.

Share this post


Link to post
Share on other sites

hold off till a month or two after the election

the AUS$ will tank hard when the labour mining tax and carbon trading taxes are brought to the floor (Yes i am predicting a Labour win , look at the betting odds)

If you think the $AUS will tank, then the OP should probably change the lot asap, not hold off. He's looking to change back into Sterling, not buy $. Giving up over $2 per £ will be a lot more painful than the current $1.75 ish. At least 15% more.

'Take the money Chris' could, IMHO, be a good decision.

Share this post


Link to post
Share on other sites

If you think the $AUS will tank, then the OP should probably change the lot asap, not hold off. He's looking to change back into Sterling, not buy $. Giving up over $2 per £ will be a lot more painful than the current $1.75 ish. At least 15% more.

'Take the money Chris' could, IMHO, be a good decision.

ahh yerp didn't read it properly just browsed quickly

offload it all now , it's downhill for $AUD from here

Share this post


Link to post
Share on other sites

ahh yerp didn't read it properly just browsed quickly

offload it all now , it's downhill for $AUD from here

Yeah, because the pound is going to get SO strong in coming years, what with the housepricecrash and armageddon forecast elsewhere on HPC....

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.