Trading Currencies

Trading Currencies

In this post on Trading Currencies, we look at the ways to deal with trading currencies, the win-win reasons behind trading currencies, the risk of trading currencies and the benefits of trading currencies.

Read more about trading currencies in this article below.

Currencies - the next big thing

Source: The Business Times
Author: Genevieve Cua
26/1/2011

OVER THE LAST few years, currency has emerged as a big investment theme as the macro plays - a weak bias for the US dollar, a positive undertone for Asian currencies - have been strong and are often spoken of by strategists.

How can you benefit without actually trading currencies yourself?

Enter Henderson Global Investors with a new Global Currency Fund, a purely systematic or quantitative strategy that seeks exposure to currencies with the highest 'carry'.

The carry trade basically involves buying a higher yielding currency, using a low-yielding currency to fund the trade. The investor profits from the interest rate differential. There is, of course, currency risk in the trade. If the currency in which you are deposited in plunges, it could wipe out the rate differential.


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Editor
Investments Singapore