Hi all,
Before I go to an FX broker with this question, I thought Iâd solicit a few opinions, tips and tactics here first. If any of the FX traders here would be so kind?
I am an EU based stock investor, so my currency measure is the Euro. I wish to buy and hold US equities with a minimum holding timeframe of 1 year.
Although Iâve bought and sold US stocks in the past, Iâve never really considered the currency risk, until now.
I have no idea what the US$ will do in future but Iâm concerned that over the longer term it will continue to fall. Iâm guessing that the rise over the past few months will be temporary.
I believe some US stocks are on offer at good prices today (in $ terms) and Iâve recently bought and intend to keep buying more US stocks but my fear is that I have bought in at the top of the current US$ rally.
I bought US$ at 1.25 so if the $ were to go back to, say, 1.60 to the ⬠(and the stocks price stays the same) Iâd be looking at a paper loss of about 22%, so-
What is the best way for me to hedge this risk?
Iâm not seeking opinion on the direction the â¬/$ will take in future but just how to effectively and cheaply hedge a potential downward move in the US$ to the â¬.
Any advice on the best FX broker to use would also be appreciated.
Thanks
Before I go to an FX broker with this question, I thought Iâd solicit a few opinions, tips and tactics here first. If any of the FX traders here would be so kind?
I am an EU based stock investor, so my currency measure is the Euro. I wish to buy and hold US equities with a minimum holding timeframe of 1 year.
Although Iâve bought and sold US stocks in the past, Iâve never really considered the currency risk, until now.
I have no idea what the US$ will do in future but Iâm concerned that over the longer term it will continue to fall. Iâm guessing that the rise over the past few months will be temporary.
I believe some US stocks are on offer at good prices today (in $ terms) and Iâve recently bought and intend to keep buying more US stocks but my fear is that I have bought in at the top of the current US$ rally.
I bought US$ at 1.25 so if the $ were to go back to, say, 1.60 to the ⬠(and the stocks price stays the same) Iâd be looking at a paper loss of about 22%, so-
What is the best way for me to hedge this risk?
Iâm not seeking opinion on the direction the â¬/$ will take in future but just how to effectively and cheaply hedge a potential downward move in the US$ to the â¬.
Any advice on the best FX broker to use would also be appreciated.
Thanks