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Post by Soutpeel on May 4, 2015 11:00:54 GMT 7
If one wanted to take some USD and put them into another currency for say next 12 to 24 months which currency would our resident experts choose and why ? Unusually my question/ comment is serious for once PS If MacWalen is reading this please refrain from commenting and no I don't wish to join the MacWalen school of forex
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siampolee
Detective
Alive alive O
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Post by siampolee on May 4, 2015 11:14:08 GMT 7
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Deleted
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Post by Deleted on May 4, 2015 11:31:19 GMT 7
If one wanted to take some USD and put them into another currency for say next 12 to 24 months which currency would our resident experts choose and why ? Unusually my question/ comment is serious for once PS If MacWalen is reading this please refrain from commenting and no I don't wish to join the MacWalen school of forex Your laugh of the day.......... A very well known poster told "ME" I should not post questions in McDodgies threads cos I have no interest/intention in joining his classes, he is in business to make money............. eye-rolling-annoyed-smiley Gawd 'elp us........
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Forex
May 4, 2015 15:48:15 GMT 7
Post by Fletchsmile on May 4, 2015 15:48:15 GMT 7
When it comes to currencies my strategies tend to be defensive, rather than looking to profit. I prefer to remove currency risk, rather than actively seek currency gains, as I prefer to make money elsewhere in more predictable asset classes. So I look to protect myself from currency movements that would be uncomfortable, rather than try and profit and make gains from them. Sometimes opportunities do come up where currencies are obviously over or undervalued so I'd try and make some gains, but as there are so many factors involved including sentiment, and regardless of what many people say can be hard to call, I prefer to make sure I'm protected from losses. A good starting point is to look at what your major expenses and liabilities will be for the next couple of years. For me, living in Thailand, I have significant THB expenses, so I make sure I have THB assets to match. Regardless of where I think the USD/THB rate is going I make sure I cover my THB bases first. Yes I might make money from USD/THB, but on the other hand if I get it wrong, my significant liabilities/expenses would cost more. So I'd rather forego any gains, and protect myself with THB to remove currency risk. If the currency does move in your favour great, but if t goes against you, you've reduced your risk to a level you are comfortable with. So your life is don't worry on the downside, and if something works out favourable that's nice. I'd rather that than be worrying I've made a call that could make me uncomfortable. After that, I'd look where I came from and whether I might go back there. So would keep some GBP as there's a chance we might go back some day for say the kids education, or something happens, we need to go back. Having some money where I am and expect to be, and some money where I came from and might go back, that's the stage I start looking to park money elsewhere as a "store of value". Since the late 1990's my currency of choice remains SGD. Sure it goes up and down, and in the last year or so, has lost a bit of value vs USD and THB. That's life, currencies go up and down. Since the turn of the century it's up over 20% vs USD and over 10% vs THB. That's a long term trend I expect to continue, even though 1 year from now or even 2 it might be weaker vs USD or THB. I'm confident longer term it's a good move. Singapore is a well run country, and although not perfect, it doesn't have anywhere near the problems US has and Thailand has. Like the US it's not that far from an increasing interest rate cycle, so when the US maybe strengthens on rate rises, Singapore won't be far behind. The country doesn't shoot itself in the foot so often like Thailand either. August 2014 1 USD bought around 1.25, after weakening to 1.37+ in March of this year, it has started to strengthen again, now to around 1.33. The USD has been on a good run, and while USD interest rate rises may in theory make the currency stronger, problems in the US may weaken it. At around 1.33 though, it's already weaker than a year ago, so you're not buying at a peak. Although it's been weaker against the THB in the last year or so again that looks to be reversing. The other thing I also like about SGD is it is an Asian currency, so will correlate to an extent more with THB than say GBP. I regularly monitor how much I have in THB, GBP and SGD, and from time to time rebalance. Those are my main choices though, for the reasons above. THB for here. GBP where I came from and case I go back. SGD as a good long term offshore store of wealth. After those are sorted, and reasonably balanced I might consider punts/ positions on other currencies. I also hold some EUR, some USD and some AUD, just for diversification. AUD has taken a beating, but may be a while till it picks up, and needs some sort of recovery in the resource sector. Am waiting before I add to that. EUR I prefer to USD, as having been beat up, but it's already strengthened a bit. At the moment though I prefer to focus on THB, GBP and SGD. Cheers Fletch
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Forex
May 4, 2015 16:30:26 GMT 7
Post by paddyjenkins on May 4, 2015 16:30:26 GMT 7
I am not an expert, but I will voice an opinion anyway, even though I doubt the USD will do too badly over the next few years. But I assume the OP thinks the USD is currently overvalued and is therefore looking for a medium term alternative. First, looking at the main currencies people think of, JPY, EUR, GBP and AUD, all look risky to me. They could all bounce violently or continue their fall, so I would avoid adding to those. There are "oil" currencies such as NOK, CAD but NOK can be very volatile and Canada has a huge property bubble that could burst, so I will rule those out too.
There are some SE Asian currencies to look at....MYR, THB, IDR and SGD. For me, THB is too much like USD so forget that one. Indonesia is playing some dangerous fiscal games so I will not choose that. MYR has been weak, partly because of oil, partly for more structural reasons, but they have introduced a GST which should help balance their budget. Interest rates are typically about 3-3.5% in FD accounts so I will shortlist the MYR, assuming you can open an account and efficiently move currency in and out. AS for SGD, rates are essentially zero and if inflation stays low the MAS will probably weaken the currency, so probably a bad choice.
Then there is the big new 800 pound gorilla...the RMB...the Chinese currency. They are internationalising, are not subject to the risk of sudden sell offs, are unlikely in my opinion to devalue as they are trying to encourage domestic consumption. The downside is they have been more or less pegged to the USD, so perhaps not a very good choice.
So it seems the only somewhat attractive alternative is the MYR....which is a surprising conclusion...but is it what it is.
Anyone else? KRW, RUB...am I wrong on GBP? Is EUR going to continue to recover? How about Latin America or India, or SEK...or Africa?
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ATF
Crazy Mango
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Forex
May 4, 2015 17:30:51 GMT 7
Post by ATF on May 4, 2015 17:30:51 GMT 7
Safest bet is GBP followed by EUR but EUR will probably reach parity before a reversal.
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naam
Crazy Mango
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Forex
May 4, 2015 19:09:03 GMT 7
Post by naam on May 4, 2015 19:09:03 GMT 7
not if Milliband makes it.
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Forex
May 4, 2015 19:15:29 GMT 7
Post by paddyjenkins on May 4, 2015 19:15:29 GMT 7
not if Milliband makes it. Milliband will be a disaster...but the Tories will pave the way to a referendum on EU exit...good or bad for the GBP?
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naam
Crazy Mango
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Forex
May 4, 2015 19:19:10 GMT 7
Post by naam on May 4, 2015 19:19:10 GMT 7
not if Milliband makes it. Milliband will be a disaster...but the Tories will pave the way to a referendum on EU exit...good or bad for the GBP?your guess is as good as mine.
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ATF
Crazy Mango
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Forex
May 4, 2015 20:45:37 GMT 7
Post by ATF on May 4, 2015 20:45:37 GMT 7
not if Milliband makes it. Absolutely no decisions should be made until after the election but the normal range of GBP/USD is $1.50-$2.00 If Millipede gets in who knows but if UKIP get in GBP will go crazy a serious opportunity for speculators.
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Forex
Jul 2, 2015 15:22:23 GMT 7
Post by paddyjenkins on Jul 2, 2015 15:22:23 GMT 7
...look at a chart over a few years, the last month or so has been a very small move, basically noise, just a little on the dumb side to somehow assume that the 10 year low all came about over a month or two. So the answer is come back in a year or two and ask then, if you're still around, because the OP was interested in USD alternatives for the medium to long terms, i.e., not a few weeks. id say a currency at a 10 year low, once which pays a decent interest rate, would certainly be one to look at very seriously. And I did say, by the way, in the beginning of my post that the USD would be fine.
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