Ladder your way up to a decent exchange rate?

[can1983]

So a problem lots of us have is there's a deposit for a house sat in the uk rate to oz is very bad. Apart from some tax liability and considering the aud is always traded heavily way beyond its significance as a small country: can you keep bouncing money between uk and aus accounts laddering your way up to a decent exchange rate over time (say 1-2 years) during this time several large fluctuations are inevitable

move £100k today gets 175k aud

wait for rate to fall to say 1.6 move back gets £109375

wait to return to 1.75  191k aud

etc

of course there is risk but this effectively gets you 2 to the pound without it hitting anything like it.

i know the other option is to wait for 2:1 but that isn't guaranteed in 1-2 years is it...

 

 

[newjez]

8 hours ago, can1983 said:

So a problem lots of us have is there's a deposit for a house sat in the uk rate to oz is very bad. Apart from some tax liability and considering the aud is always traded heavily way beyond its significance as a small country: can you keep bouncing money between uk and aus accounts laddering your way up to a decent exchange rate over time (say 1-2 years) during this time several large fluctuations are inevitable

move £100k today gets 175k aud

wait for rate to fall to say 1.6 move back gets £109375

wait to return to 1.75  191k aud

etc

of course there is risk but this effectively gets you 2 to the pound without it hitting anything like it.

i know the other option is to wait for 2:1 but that isn't guaranteed in 1-2 years is it...

 

 

Or you could just go to a casino.

[NicF]

10 hours ago, can1983 said:

So a problem lots of us have is there's a deposit for a house sat in the uk rate to oz is very bad. Apart from some tax liability and considering the aud is always traded heavily way beyond its significance as a small country: can you keep bouncing money between uk and aus accounts laddering your way up to a decent exchange rate over time (say 1-2 years) during this time several large fluctuations are inevitable

move £100k today gets 175k aud

wait for rate to fall to say 1.6 move back gets £109375

wait to return to 1.75  191k aud

etc

of course there is risk but this effectively gets you 2 to the pound without it hitting anything like it.

i know the other option is to wait for 2:1 but that isn't guaranteed in 1-2 years is it...

 

 

Unless you are an actual currency trader I think this could be tricky.  The buy and sell rates are different, although the larger the sum the closer to the mid market rate you get, meaning the variations in exchange rate would have to be fairly large to really make any money doing this.  You are also taking a risk that your money ends up in the wrong country with a poor exchange rate at the point you actually need it meaning you loose money at the end of it all.  And what happens if the exchange rate doesn't move in the direction you are expecting and you only get to transfer once?  If you are happy to take a risk and don't mind if the end result is a loss then you potentially could do this.

[rammygirl]

Potentially you might even be taxed on the gains if they decide you are trading for profit........

[Gbye grey sky]

11 hours ago, can1983 said:

So a problem lots of us have is there's a deposit for a house sat in the uk rate to oz is very bad. Apart from some tax liability and considering the aud is always traded heavily way beyond its significance as a small country: can you keep bouncing money between uk and aus accounts laddering your way up to a decent exchange rate over time (say 1-2 years) during this time several large fluctuations are inevitable

move £100k today gets 175k aud

wait for rate to fall to say 1.6 move back gets £109375

wait to return to 1.75  191k aud

etc

of course there is risk but this effectively gets you 2 to the pound without it hitting anything like it.

i know the other option is to wait for 2:1 but that isn't guaranteed in 1-2 years is it...

 

 

Firstly you need to be confident that the rate will move significantly both up and down as you have speculated in your example.

Secondly you have to get the timing spot on.  To use your example you are waiting for it to fall to 1.6 but it falls to 1.7 and appears to be going no lower.  Do you jump ship and take the small profit and risk that the next move may be down?

Second guessing the currency markets is risky and every time you move money it costs you in commissions etc.

[can1983]

3 hours ago, Gbye grey sky said:

Firstly you need to be confident that the rate will move significantly both up and down as you have speculated in your example.

Secondly you have to get the timing spot on.  To use your example you are waiting for it to fall to 1.6 but it falls to 1.7 and appears to be going no lower.  Do you jump ship and take the small profit and risk that the next move may be down?

Second guessing the currency markets is risky and every time you move money it costs you in commissions etc.

It always moves significantly over time the AUD is very highly traded what other first world currency moves from 1.4 to 2.2 to the pound over a year or two? 10's of percent

What about moving half at 1.75. if it drops move it back to have more in the uk to transfer back when it picks up. if it increases move the rest and be done with it.

A test the water strategy. I've just heard/read too many stories of waiting for 2 to the pound and stuck renting in oz for years fixated with the exchange rate instead of getting on with life

[can1983]

ok so its all how you look at the rate I've got 2 AUD for a pound stuck in my head

these are the 1,2,5 and 10 year average exchange rates

1 1.68

2 1.76

5 1.80

10 1.79

So todays 1.75 is very very average not bad not good. The last time it dropped below 2 before 2016 was 2009 and it didn't yet back above 2 until 2015!!!!

so anyone who wants 2 might wait many years to get it