Investing in USD to hedge against the falling value of Euro

hedgeeverything

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I have a considerable amount of cash in my portfolio (41%), all Euro. Most of it is going towards a property purchase, so I'll need it in the next 12 months.

Something I've been keeping an eye on is the rising value of USD as people sell assets. The USD is rising in value against a lot of currencies, as people sell assets into USD. Even with the feds printing press going, I still see the USD increasing against other currencies.

With the current problems in the EU, I'm wondering is it worth investing in some short-term bonds in dollars. I know the yield on bonds is low, even approaching near zero.

But wondering if I should hedge against Euro at all. I'm not looking to make a profit, trying to protect the investment saved for the house.

Curious what other people think about the euro and the problems the EU hare having.

thanks
 
If you are buying in euros which I presume you are, why are you worried about the euro/dollar exchange rate. In any case the dollar could also weaken against the euro, afterall the Fed reduced interest rates and many are predicting they could also go negative. Hedging is not risk free if something goes in the opposite direction to that which you are hedging, look at ryanair who hedged their fuel prices at $60 and now the oil prices are at $20. They wanted to protect themselves against very high oil prices (which was still a sensible strategy ) but oil went the other way. The future is unknowable
 
Unless you’re planning to buy a house in Palm Beach, EUR/USD exchange rates should be of no concern to you.

Your funds are earmarked for use over the next year or so; under no circumstances should you invest. Simply hold your money in cash.
 
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