 Poster: A snowHead
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@Raptor23, I’m buying euros at anything over 1.18 over the next 9 months Yes that would make sense towards the top of the range and you leave the other 2 cents for the other guy as the saying goes . Equally if I had €’s to bring back to £ I’d be targeting 1.12 .
Best I’ve got this year is 1.205 5 mins after the exit poll election night .
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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@LaForet, not forgetting the weather since the autumn will probably lead to higher food prices, thus increased inflationary pressure.
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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| LaForet wrote: |
UBS latest analysis for investors - including factoring-in coronavirus - is the CHF:GBP (currently 1CHF=£1.21) could go down to 1CHF=£1.15 during negotiations, but that by the end of 2020 should hit 1CHF=£1.29 and long-term would go to £1.35 They think that the £ is undervalued because of Brexit uncertainty and that detachment from the EU could have an upside because like the CHF it makes it a more liquid currency. Basically, the volatility range is 1CHF= £1.15 to £1.39 over the next 3 years.
I am not a currency trader and I have no idea whether this analysis has merit. But I have found that the UBS projection record has been quite good over the last five years. So if they are right, then for Brits looking to holiday in Switzerland, you might think that the issue won't be the exchange rate, but more whether home economic conditions encourage/discourage spending on an Alpine holiday.
Personally, I think that the coronavirus effects on the economy combined with higher cost of staple product imports as a result of Brexit, reduced tax income from EU migrant, and the need to bribe Red Wall constituencies with a range of public sector projects, will all combine to drive up the cost of living in the UK. And even for the middle-classes in good jobs, reduce the amount of money available to spend on Alpine holidays. So to answer the thread's title question - No. Next season won't be more expensive. But Brits will have less money to spend on a ski holiday and so fewer will go. |
This is no place for reasoned analysis!
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LaForet,
I think I get the general gist of your ubs post but I'm puzzled by the start of it: specifically:
'1CHF=£1.21) could go down to 1CHF=£1.15 during negotiations, but that by the end of 2020 should hit 1CHF=£1.29 and long-term would go to £1.35 They think that the £ is undervalued because of Brexit uncertainty and that detachment from the EU could have an upside....'
So they're forecasting that 1 CHF will buy me £1.35 long term, versus £1.21 today, and this means Stg will strengthen!? E.g. 'they (ubs) think that stg is undervalued...'??
Can you explain???
Genuinely puzzled, or maybe I'm just thick 
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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@horgand, La Foret had his figures the wrong way round - he should have said £1=CHF1.21
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@horgland yes, and apologies for the confusion. The UBS analysis is that you're looking at £1 ranging from CHF 1.15 to CHF 1.39 over the next 3 years. The negotiation uncertainty could drop it to the CHF 1.15 level, but once that's finished - whatever the outcome - certainty sees the GBP strengthen again. And in 3 year's time it could get to CHF 1.39
I only recently realised that it's important not to confuse exchange rates with the economic conditions in the UK for individuals. Brexit may make my weekly shop more expensive, the coronavirus may hit the economy, buying a new car may cost 10%-20% more, there may be a hit to employment levels, etc. etc. but the exchange rate is dependent on a wide range of factors. A wide segment of the UK holidaying public may find that they have less disposable income to spend on an Alpine holiday, but that doesn't necessarily mean the holiday itself will become more expensive.
And re the question of how UBS work all this out? I have no idea. I don't have the background in economics to make an informed judgement around their logic and analyses. But of course, UBS has access to huge amounts of their own and market data that an ordinary individual does not.
Those of you who have a local foreign bank account may find you also have access to your local bank's financial briefings. The UBS ones are free to me because I have a UBS account for our apartment in Switzerland. So you might find it worthwhile taking a look and seeing if your bank has investor material not available to the general public. When we bought our apartment, we got CHF 2.44 to the £. The last time I moved any large amount of money out for a refurbishment, we got CHF 1.59 to the £. It's currently about CHF 1.25 to the £. This is over a 17 year period and I don't see us selling it for a while yet. But it is certainly worth doing some research about exchange rates just so you can plan for when you need to do a refurb' and/or when you sell it. In addition, if a period of devaluation is comprehensively predicted, it gives you an option to easily move some money out of sterling if you have any to spare.
(and try not to get confused about the exchange rate representation, like I did in the original post! Which I've now corrected. Sorry)
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@LaFloret thanks for that great explanation. It's only when you detail the exchange rates you've encountered over your period dealing in CH that you can really see how these long term movements can impact on investments, lifestyle and wealth....
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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I'd just say a few further things: First, I'm definitely not saying you should expect similar asset appreciation solely through exchange rate improvements. It's fortuitous that for every £1 we spent in 2003, we'd now get back almost £2, before any generic increase in the value of the property. It could just as easily have gone the other way - in fact for almost 2 years it did, with the £ gaining against the CHF (the "If we'd just waited a year ..." syndrome). So you have to be prepared to swallow these sort of fluctuations, otherwise you'd be driven mad.
Second, I think it's worth keeping some additional capital in the foreign currency 'over there' for things like maintenance and refurbishment. And holiday spending. This insulates you from fluctuations and means that when you take a holiday there, you're not spending money in the UK i.e. it's like a 'free' holiday (obviously not 'free', but more pre-paid).
And third: You can probably make the place wash its face by renting out. This insulates you from currency fluctuations and means you don't have to hit your UK finances to fund basic running costs. Obviously, there's wear-and-tear etc. but only for a part of the year - it's not like renting a UK place long-term.
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There's a lot of slightly unintentionally twisted info here I'm afraid. The exchange rate of GBP to CHF, both historically and for more than any short term future, is far more about the strength or weakness of the CHF than any GBP strength or weakness. Any advice you get from UBS or other institutions on such things is, I'm afraid to say, kind of BS. Not in the sense that it's not true - just that it doesn't mean anything. If you see below I have linked a chart of GBP Vs CHF - each bar representing a month. I have marked 1.39 and 1.15 on there with horizontal white lines - hopefully it is obvious that they are essentially saying price will stay roughly where it has been for the last 3 1/2 years......
I also marked a vertical line for June 2016 - Brexit vote date - which obviously had an impact but, relative to other moves in the exchange rate over the last 20 years, it was nothing that crazy.
The strengthening of the CHF has been pretty much universal against all currencies. There are reasons for that, which aren't worth going in to here and wouldn't be much help to anyone.
I trade currencies for a living btw - so hopefully I have an idea of what I'm talking about - although not guaranteed 
https://www.screencast.com/t/7HwvsMW0l
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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I tend to ignore all forecastors in assessing currency movements, as they are often only interested in the short term. (for which private investors have no way of competing due to transction costs) I found when doing my own analysis of currency pairs, that the best way to assess long term market implied movements is to compare long term government bond yields in the respective currencies.
Going as long as possible in both currencies, gives you a good indication of the market's view of the currencies with respect to each other.
A 30 year government bond in Switzerland yields to redemption -0.1% currently. In the UK this is 0.8%. A difference of 0.9%. Not all of this difference will be due to expectations of currency depreciation of the £ versus CHF. Some might be due to taxation differences, some due to supply differences.
However, in the long term I would expect the Swiss franc to get stronger against the pound by approximately 0.9% per annum than its recent average against the pound.
In the short term, currencies fluctuate more than government bonds at the long end. This is because large money flows make the currency move, but generally the sales from the assets in those currencies may not be in government bonds. If it is a small economy in relation to USA, then this can cause short term fluctuations compared to long term due to everyone rushing to the exit at once.
An analogy might be investment trust discounts to net asset value. Sometimes they go very negative, when there is a rush to the exit. This means that the underlying asset is worth more than you are paying, but if it normally trades at a premium then the rapid change may only be temporary until the surplus sales are satisfied or reversed because of the cheap prices.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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We paid for ski hire on 23 Feb, 400 euros cost £334 - had a refund yesterday 400 euros £365....
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You know it makes sense.
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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| stewart woodward wrote: |
Have you not got a link to the story where Renault are thinking about moving suv production to Sunderland  |
And the Italians ever closer to leaving the EU.
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Poster: A snowHead
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How wil ski resorts cope with non schengen citizens money?
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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and the Dutch with not having any fish to eat.
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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Stan-troll has been peddling his doom-porn on Sterling for a few years now. I'd expect him to predict £1 = 0.50 Euro by Xmas this year.
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You need to Login to know who's really who.
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At least the Dutch Government have encouraged singles to pair up with a 'sex buddy' to avoid isolation issues.......
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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You'll need to Register first of course.
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Blimey ! Stanton Soros is back £ must have had a Couple of weak days last week cause he’s copying and pasting again .
£ is cheap regardless of Trade deal or not and will bounce when and if it hits the 1.09 € level as has done for the last 5 years .
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Knopf Kopf ist zuruck!
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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Rate today 1.11, a month ago 1.11, a year ago 1.11. Future rate? Now if I knew that........
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@stanton Soros is back !
@DJL, Thanks for pointing out the flaw in the argument
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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@stanton, you going to start bleating on about parity again?
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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The pound is higher today than when Niels started this thread (1.11€ vs 1.10€...) back in 2016...!!
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@stanton,
How's the pound doing? With brexit etc I expect some where near parity with euro 
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You know it makes sense.
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@stewart woodward, you beat me to it I was going to wait till next week !
@stanton, Still short ? Soros Isn’t
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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@Rob Mackley,
Sorry couldn't resist 
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Poster: A snowHead
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Very annoying isn’t it. I just repatriated some Euros. Parity would have been good.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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Ftse and NL index going to have a bit of a wobble/bubble in coming days due to unilever realignment. No doubt stantroll will spin this as something anti uk/brexit issue.
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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You need to Login to know who's really who.
You need to Login to know who's really who.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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Yawn
But next season is going to be more expensive in the b&b and catered part of the market in the simple law of supply and demand - huge reduction in supply as evidenced by so many chalet companies falling over and I suspect some small hotel operators will also give up and convert into apartments. Restaurants will fold and prices will go up. Oh and airlines have to recover the losses they have made.
I am not going to get into an argument on exchange rates other than if I knew what was going to happen I would be able to buy the whole ski resort and, as Stanton is an expert, I have no doubt he owns quite a number of resorts now from his profits
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@countryman,
Yup, I fully expect prices to rise in resorts, as they try to claw back a 12 month of lost revenue.
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Neils started this in July 2016 -- 70 pages later the 'event' still has not happened !!
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| countryman wrote: |
| But next season is going to be more expensive in the b&b and catered part of the market in the simple law of supply and demand |
You mean 2021/22?
That's a long way off - lot to happen between now and then.
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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| albob wrote: |
| Neils started this in July 2016 -- 70 pages later the 'event' still has not happened !! |
There’s a lot of this .
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Well that’s that done then and the £ is trading € around 1.11 possibly going up some more when the markets open again , interestingly never got anywhere near parity .
I really never had a major view one on this one , in or out as both arguments had their advantages the only thing I did know and still know is that £ was cheap and was never going to get to parity .
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FAQ
