Euro is imploding : Pros/Cons for BFG personnel?

Discussion in 'Army Pay, Claims & JPA' started by REMFQuestions, May 17, 2010.

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  1. Hey all, I am watching the Euro tumble on my sidebar application as I type this - from 1.16 to 1.17...

    How quickly is the Forces Fixed Rate adjusted for these sorts of fluctuations? Is it one calendar month?

    The French threatened to pull France out of the Euro completely 8O

  2. Alsacien

    Alsacien LE Moderator

    Journalists make a living with statements like "it is reported that", look for more credible sources, France is the last country that would leave the Euro freely.....

    There is a potential to make a few quid as the FFR mechanism cannot react very quickly and cannot use forecasts with confidence. (I wonder who the MOD contract for this?)

    What is the FFR today?
    Do you have a post office account....... :wink:

    I would have expected Sterling to have risen against the Euro to about 1.25 after the election win for the Tories and their deficit cutting plans, but it has'nt moved hardly at all (look at Bloomberg not your sidebar), just between 1.16-1.18 since the polls closed last week. Significant is the fact the Euro seems to be dragging the pound around while going down against the dollar.
    If the UK emergency budget goes down well the pound will strengthen, but its risky in terms of economic recovery which will be measured months later.
    If the EU heads sign off a quick deal to tighten up fiscal rules the Euro will strengthen.
    These and other unforeseen elements will effect the curves - I'm taking a longer term view that I will see 1.30+ to the pound at some point in the next year.....but if you can move funds in and out of a PO account at the going FFR rate.....
  3. Mate you are talking to a finance biff.

    All I know is that if the graph goes down I got more money when for my £. If you have a way for me to do that I am all years believe me!
  4. Alsacien

    Alsacien LE Moderator

    I'll drop you a PM tomorrow when I get chance to explain - in the meantime can you find me a link to the FFR, and even better historical FFR rate data?
  5. samm1551

    samm1551 Old-Salt Book Reviewer

    FFR is currently 1.1, changed a couple of months ago from 1.7, but don't know what it was before, sorry.
  6. I only moved to BFG 3.5 years ago - it was 1.5 € to £ then. It was stable for a couple of years, then dropped madly to almost parity over about 6 months. The world didn't stop then, and probably won't now. FFR adjusts to reasonable rates monthly if required.
  7. Also, don't forget that LOA is used to balance out fluctuations in the FFR meaning, in theory (and depending on how you split your pay between UK and Germany), that most people should end up with pretty much the same number of Euro going into the bank at the end of each month.
  8. Because of the adustment of FFR and LOA rates the effects of currency fluctuations should have minimal effect on BFG personnel. In the 70s the Pound fell like a brick from around 5.50 DM to the Pound to around 3DM+ in a short time. We lost a few DMs because the Naafi prices also went down, allegedly. The net effect was minimal and life went on as usual. I don't see anything dramatic happening to BFG personnel as a consequence of the Euros behaviour. Despite gloom and doom warnings in the media the Euro will ride out the storm.
  9. The FFR seems to be checked about every 3 months and is changed if it is out of synch with the existing exchange rate by a certain percentage (can't remember ho much). However although LOA is adjusted to take account of fluctuations I am not sure how often this happens. I have to say that, since arriving in the eurozone 2 years ago, we have found things increasingly tight. Still comfortable but every penny of LOA is spent.
  10. Same
  11. Alsacien

    Alsacien LE Moderator

    As the thread is still alive I'll post rather than PM.

    So the FFR is adjusted every 3 months, I seem to recall that was always the case.
    The LOA is calculated IIRC from a list of standard items and services and a price comparison to the mean UK cost, plus some sort of "inconvenience" allowance for postage, phonecalls etc.
    IIRC the FFR changed more frequently than the LOA??
    This has never been a very precise solution, and can work for and against you.

    If you have a 1000 quid paid into your Germany account you will only get 1100 Euros.
    The actual rate is here:
    This is the most reliable source you can access.

    A bank will never give you that rate, they have a buying and selling rate which allows them to make a profit. (One advantage of the common currency in the Eurozone is the billions saved on these transactions).
    The same happens on your credit card, if you purchase in a foreign currency it is converted and billed in pounds on your statement at a rate they quote - usually better than the banks as the overheads are lower.

    So for you 1000 quid, today you are being diddled out of 60 Euros, but you would be diddled out of 20 Euros on the selling rate anyway :D

    This is where the Post Office account comes in, because you can access it instantly in BFG. Alternatively you can arrange a rate with a UK bank for Euro/Sterling transactions, or use a multi currency account, or even Paypal.

    Now if you happened to have a spare 1000 Euros today, walk in to the PO and pay it into your account you will get 909.09 because they use the FFR. What you should get is 856.89 at the real rate today - 53.80 profit...
    The same applies in reverse if the FFR is higher than the day rate.
    This only makes sense if there is a reasonable deviation between the two, and of course if you have the spare loot......
  12. Agreed all that. Sadly (only partly) I'm not in BFG.
  13. I'm not an SME, but those around me have stated with authority that the FFR needs to have fluctuated by 10% for more than a month for it to change (either way). If this is the case it needs to rise to 1.21 for a steady period before we see a change. In the meantime our LOA will remain approx £300 higher (Maj no brats) than it was last Sep. In the end it should all balance out. However, with the Euro at 5% difference (ie around 1.6) it is probably better to change your allotment to the UK and then draw cash from your UK back account than have your pay paid into a german account.......
  14. Alsacien

    Alsacien LE Moderator

    I would agree with that advice, one caveat though, how often are you (and a tom) allowed to change your allotment to UK?
  15. Allotment changing is really quick over JPA now, and an individual can adjust it monthly if he wants, it just has to be in the system before the pay run kicks off, which is on or about the 15th of the month IIRC.