I have just listened to a podcasted interview with Moneycorp. In the interview, David Kerns, a senior trader with the outfit spoke about the exchange rates between Sterling and the Euro, and Sterling and the Turkish Lira.
What he said on the Euro was hardly surprising. The Pound is weak against the Euro, because of the depressed UK economy that is printing money, and because the Bank of England want a weak Pound so ur companies can get a foothold overseas -- in other words they are quite happy to take advantage of the situation.
However, he did say that the Pound was going to go down to 1.05 Euros in the next month, but it has since rallied and is currently back up at 1.097. Kerns said that a fair price for a Pound is 1.15 Euros, so if the Pound does overshoot this when the UK economy recovers then it is definitely worth making then the time to buy a property in the Eurozone; to capitalise on instant equity.
It is the performance of the Turkish Lira that is the biggest surprise however. Kerns said that the Lira was going to stay strong, because its high yielding potential makes it a favourite for investment among the brave. Since then however, the Pound has climbed to be worth 2.393 Turkish Lira, up from 2.29 as Kerns spoke.
When the Lira strengthens it tends to go as far as 2.30 against the Pound, this is a kind of imaginary floor if you like, and 2.35 - 2.40 is the long term average. With that in mind anytime the Pound is worth more than 2.40, British buyers get instant equity in Turkish property purchases, and it could very well go higher than that in the coming weeks.
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