How to take advantage of low dollar ?

T

tony79

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Any advice on how we should be taking advantage of the low dollar ?

buying US property, new york ? shopping in the US ?
 
Hi tony - I'm thinking of buying some cash for a shopping trip next year.

I was half listening to radio 1 news this evening and some fella was saying it will get worse in the next couple of weeks.
 
tony79 said:
Any advice on how we should be taking advantage of the low dollar ?

buying US property, new york ? shopping in the US ?
Click to expand...

Don't bet more than you can afford to lose but if you holiday in the US then I hope you have fun and find some bargains.
My view is that; having minimum scruples like all election year governments, that Bush will lower interest rates further to stimulate the US economy. The republicans will want to make their party's economic management look good especially in the election year. Hence the US dollar will fall further.
 
Afaik, the Fed (i.e. Ben Bernanke) is totally independent of the Presidential administration.
 
For what its worth I feel there is more to go in the usd slide in particular against the euro. However if its only for a shopping trip, unless you are a mega spender I would look to lock in the rate around here as the difference btw 1.45 or 1.55 is minimal. With regard to investment I feel we might see 1.55 or 1.60 absolute max so a long term trade going short euro 1.53-1.55 ish with a stop above 1.60 looking for a move back towards 1.30 in the next 2 years seems attractive from a risk reward perspective.
 
What about opening a US broker account and buying US shares or Index funds?

what would be the most cost effective option?

Slim
 
Any drawbacks to this Slim?
What about these funds? [broken link removed]
Anyone willing to take a gamble?
 
For value investors and people who believe the dollar may revalue this fund looks intereting. The charges seem reasonably 0.75% entry and exit charge. Am I right in that these are the only charges? Are their seperate charges for Blackrock Merrill Lynch ??

However I tired having a look at the fund prospectus. 60 pages on rubbish on all Blckrock ML funds, the Simplified prospectus gave 40 pages of rubbish, with no details on what companies, sectors, etc the fund invests in. The information provided is particulartly poor in comparison to Eagle Star, see link below.

[broken link removed]
 
be careful not to confuse the 'base' currency of any fund with the true underlying currency exposure. E.g. if you buy Euro denominated share class of a US equity fund it's really only a settlement currency convenience.. your still exposed 100% to EURUSD risk which will present itself in the share class NAV performance via fx translation of the underlying USD assets back to EUR. An alternative is to look out for FX 'Hedged' share classes where the provider will run an fx forward overlay within the fund share class to protect against unfavourable exchange rates moves.. note however this is not a free option!.. on the flip side the hedging will preclude you from benefiting from favourable fx moves.
 
bigred - I don’t really understand what you are saying (I'm a novice here), with this Fund - if the Dollar regains against the Euro - will I be able to net the gain if I cash in? Is my out-look too simplistic?
 
Hi emoclew..yes your broadly corect.. for this fudn it looks like about half the fund is in USD and about 10% in JPY.. the balance in Europe so moslty EUR with some GBP and CHF I would imagine. If USD and JPY appreciate v EUR then the fund NAV will gain from the postive fx translation of the fund assets..
 
Thanks bigred for your feedback. I'll have a look at the details of the investment fund later on & also see what similar Funds are out there. Over the long term it’s likely that the dollar will appreciate wrt Euro.
 
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