I am looking to reduce my exposure to the dollar over the next 3-5 years. I am currently buying gold and industrial/commodities stocks. Would it make sense to hold another currency and if so which one?
Well typically AUD, CAD, NZD and ZAR are referred to as 'commodity currencies'. But if you are looking for commodity exposure there are way more direct possibilities. If you are asking what ccy will appreciate over the next 5 years, sorry i lost my magic glass-ball recently..
I got no replies when asking about going long the CAD/JPY, but I think commodity prices can go down for a while.
Your question sounds like "I already have a motorcycle. I am looking to buy a car. Would it make sense to buy one? Which one should I buy?" If you wish to short the Dollar then simply do so. It is no rocket science. Buy a basket of different currencies, not just one. Stick with the big(ger) ones, e.g. CAD,GBP,EUR,AUD,NOK,CHF,JPY.
If you're looking for the anti-dollar, then you're looking for the Euro. The problem is that the fundamentals in the EZ are lousy, and the ECB could possibly go into QE along with the FED. That makes no currency safe.
Yeah. Right now currencies are an existential choice - whichever one you invest in has issues and potential problems. From a fundamental perspective, the natural beneficiary from this seems like gold. It's a quasi-currency and has none of the QE issues, plus it actually gets a bid in a crisis or banking panic.
If I believe dollar is trash my natural urge would be to go into CHF but because of UBS and Credit Suisse CHF is dubious. Gold is overpriced as it is. I would simply park my money in OIL. OIL is not going to zero whether the financial system collapses or not.
At the current rates I will be buying USD as much as possible. US will be the first to increase rates. US will suck all the cash from the world in the next 2-7 years. let say you just sold 1000 camels and you want to put your capital somewhere. Where will you put it? In Iceland? In Europe? In China? In Japan? or in the USA?
It doesn't seem like you're particularly interested in more commodities... just want to get away from the dollar a bit, right? I'd go with the poster that recommended a basket of currencies for that purpose which you can customize to your liking. Take a look at USDJPY, EURUSD, AUDUSD, USDCAD, GBPUSD, USDCHF, USDSEK, and even USDMXN. Adjust your exposure to each as desired. Or you can also go short the US Dollar Index Futures as a dollar hedge (traded on ICE). That's a predefined basket of currencies against the dollar.