The amateur economist

I never thought I'd turn into a market watcher let alone a market predictor but buying a property in Spain has come close to seeing me pull on the red braces and pin-stripe suit, and aspiring to nip to the nearest Porsche dealership.

When you are shopping about for holiday money you try and find yourself a decent rate but resign yourself to the fact that currency markets fluctuate and at the end of the day it only makes a few quid difference. When you are talking about buying tens of thousands of Euros then the slightest fluctuation can make a big difference.

The difference between securing an exchange rate of 1,10 € and 1,20 € to the pound is the difference between getting 11.000 and 12.000 € per £10,000. All of a sudden this realisation turns into a market watching hawk, scouring the daily news for stories which may effect the following days trends, installing the BBC's market ticker on your laptop, reading the currency exchange blogs, and trying to hit the market at its peak to maximise your cash.

As dangerous as mountain climbing

What you also need to do is lift yourself out of the tourist rate equation and get something a bit closer to the inter-bank rate - the headline rate which gets published in the newspapers, but you never get anywhere near at Thomas Cook.

We got ourself a currency consultant called Robert at Foremost Currency Group and after extensive discussions we settled on a target of 1,135 € to the pound, at a time when the inter-bank rate was around 1,100 €. In the reservation contract we'd agreed on 1,095 € so anything better than that and we were ahead.

A couple of weeks later and the pound strengthened to a level where I got the call from Robert. We fixed the price at 1,1351 € and I was happy, we were 350 € per £10,000 up on the reservation contract agreed exchange rate . But my joy was short-lived. The pound continued to strengthen, despite my extensive research, and when we eventually went to Galicia on the 21st June to complete the purchase the rate was 1,195 €, making economics yet another pastime to add to the long list of disciplines at which I am a rank amateur.

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