With high confidence many people are predicting that in the next time USD will go further sharply down in relation to EUR, and indeed the economic factors show that it is very possible. If you trade USD account but your money spending currency is different, what would be a way for hedging against USD drop? At a reasonable price and reasonable effort ! Does somebody, as a private trader, do that on a systematic basis and could share the experience.
Check us out at www.velocityfutures.com. If you open an account in euros and trade U.S. futures contracts your profits and losses will occur in U.S. dollars and your weekly profit or loss will be converted into euros every Friday and added or subracted to your euro balence. I think we can do this. PM me if you are interested and I'll make sure this is possible.
Open a currency trading acct at OANDA (www.oanda.com) You can hedge your USD acct value without any problems, just buy EURO/USD.
you could be right but consider this. as many problems as the us has it is nothing compared to the socialist countries of europe. the us$ will probably continue to be the most desirable currency in the world because there is no other good choice.
While not a sole US problem, it also has a HUGE trade deficit and while the dollar will obviously not plumit to hell it does have room to go alot lower than what it is. The whole reason John Snow has been touring Asia is trying to get China, Japan etc to let their currencies get stronger vs the USD and promote a general USD weakness to help exports from the US. Read about oil and the USD dollar too with regards to the Euro. "Oil dollars: The key to the oil dollar motivation is the fiat currency for trading oil. Under an OPEC agreement, all oil has been traded in US dollars since 1971 which makes the US dollar the de facto major international trading currency. Nations actually need a common currency for trade. With the trade so badly balanced, the majority of the money flow is one way. If other nations have to hold US dollars to buy oil, then they find it is convenient and necessary for them to do other trading in those dollars. This fact gives the United States a huge trading advantage and helps make it the dominant economy in the world. As an economic bloc, the European Union is the only challenger to the USA's economic position, and it created the euro to challenge the dollar in international markets. However, the EU is not yet united behind the euro - there is a lot of jingoistic national politics involved, not least in Britain - and in any case, so long as nations throughout the world must hoard dollars to buy oil, the euro can make only limited inroads into the dollar's dominance. Iraq's switch to the euro has got Iran thinking about switching too; Venezuela, the fourth largest oil producer, began looking at it and was cutting out the dollar by bartering oil with several nations including America's bete noir, Cuba. Russia is seeking to ramp up oil production with Europe (trading in euros) an obvious market." America gets up huge debts, but other countries have to buy USD to buy oil, a license to print money. Obviously Iraq will no longer be trading in Euros now. If UK joins the Euro however that will be Brent crude produced in a Euro nation and will give other nations an incentive. While the USD is obviously still the "worlds currency" to an extent, It would be foolish to discount the Euro when it encompases so many varying countries and is on the border of so many more. Imagine what would happen to the USD value if countries started dropping vast amounts of dollars so they can also use Euros to buy oil. Americas debt problems would suddenly get a whole lot worse.
"It would be foolish to discount the Euro when it encompases so many varying countries and is on the border of so many more. Imagine what would happen to the USD value if countries started dropping vast amounts of dollars so they can also use Euros to buy oil. Americas debt problems would suddenly get a whole lot worse." while its true that it would be a problem if the euro were to replace the dollar i dont see it happening. in fact i have doubts the euro will even last longer term because it requires all the euro members to have equal social spending and that is already causing friction amoung countries. sweden recently rejected the euro because they dont want some unelected idiot telling them how to run their country. ( http://news.bbc.co.uk/1/hi/world/europe/3108616.stm )england has so far rejected the euro and i doubt they will ever vote to join them.
Interactive Brokers allows you to easily switch cash holdings to other currencies at competitive rates.
Ive thought about the long term prospects of the Euro too, certainly one policy for many countries has built in problems with the French/Germans flouting their self imposed rules the moment they want too not giving a good sign. However how long term is long term? For the purpose of the initial poster then I would be intrested in hedging into other currencies outside the USD and I think it is only common sense to protect yourself, as it stands the "value" of 1 Mil USD is now ~20% less in europe (and other countries) then it was 2 years ago. Given that there are not many major currencies to go with, you can easily split your assets into multiple streams that protect your overall "global net worth". "they dont want some unelected idiot telling them how to run their country. " The US or Europe?
With IB European residents can open an acct in EURO's so they don't have the EUR/USD risk on their initial deposit. I would love to have other brokers do the same (offer EURO accts). Now I have to maintain a NON SIPC currency trading acct at Oanda to hedge the USD acct I have. I would certainly consider moving my other accts to a broker that offers EURO accts.