Expat Forum For People Moving Overseas And Living Abroad banner

1 - 7 of 7 Posts

·
Registered
Joined
·
202 Posts
Discussion Starter · #1 ·
Good Day Mates!
I have been in OZ for a while now, thought I would begin with an Aussie welcome.

I am sure there are many people in the same boat as I am.....

I have managed to save quite a few AUD and with the AUD falling against USD (currently 1 AUD = .74 USD) back in 2013 1 AUD = 1.10 USD.

MEANS A FALL OF OVER 25% in the last 2 years and the signals which I am getting from the various economic factors the AUD is set to fall further.

RBA wants AUD to be around 70 - 72 cents against USD to be competitive for exports.

Now the big question is....what is the best way to hedge against the possible erosion of my savings....Ideally I am seeking an option where I could get my AUD converted into Pounds or Euro and then eventually transferring to India in INR to earn higher returns ( 15-20%)

Currently 1 AUD = INR 47 ; 2013 - 1 AUD = INR62. ( Drop of INR 15)
Does anyone know of any good Hedge fund management companies or have done something similar to minimize the losses due to currency fluctuations.

I would love to hear from people who have better understanding on the subject.

Cheers
 

·
Registered
Joined
·
1,039 Posts
Good Day Mates!
I have been in OZ for a while now, thought I would begin with an Aussie welcome.

I am sure there are many people in the same boat as I am.....

I have managed to save quite a few AUD and with the AUD falling against USD (currently 1 AUD = .74 USD) back in 2013 1 AUD = 1.10 USD.

MEANS A FALL OF OVER 25% in the last 2 years and the signals which I am getting from the various economic factors the AUD is set to fall further.

RBA wants AUD to be around 70 - 72 cents against USD to be competitive for exports.

Now the big question is....what is the best way to hedge against the possible erosion of my savings....Ideally I am seeking an option where I could get my AUD converted into Pounds or Euro and then eventually transferring to India in INR to earn higher returns ( 15-20%)

Currently 1 AUD = INR 47 ; 2013 - 1 AUD = INR62. ( Drop of INR 15)
Does anyone know of any good Hedge fund management companies or have done something similar to minimize the losses due to currency fluctuations.

I would love to hear from people who have better understanding on the subject.

Cheers
If you deal in millions or billions then yes hedging might be an option. I myself is a victim of this crash...now i pay 20% more EMI per month back in India....trying to finish my loan by the end of this year as many economists are predicting AUD at 65 cents level by 2016 first half which will be disastrous....
 

·
Registered
Joined
·
637 Posts
If you deal in millions or billions then yes hedging might be an option. I myself is a victim of this crash...now i pay 20% more EMI per month back in India....trying to finish my loan by the end of this year as many economists are predicting AUD at 65 cents level by 2016 first half which will be disastrous....
Hey mate, who do you use to transfer money to India ? This falling AUD has delayed a lot of my plans :mad:

OP, how much is quite a few AUD ? Last I looked into doing something similar, the transaction fees ate up all the expected profit leaving me an extra few paise. So if you are saving a million paise, then you will make an extra INR 10k. So IME this wont work for an run of the mill income earner.
 

·
Registered
Joined
·
246 Posts
no currency is safe against USD for time being, so, your conversion rate to USD from any currency is more or less same.

every currency is facing same issue with USD.
 

·
Registered
Joined
·
965 Posts
Keep them in local currency and hope for a bounce back in a years time
 

·
Registered
Joined
·
337 Posts
It's really difficult to predict the movement of currencies and the reasons for those movements. I haven't done much research on this so I'll just tell you the way I would evaluate it, if I were in your position:

1) If the AUD is falling against the USD because of the anticipated rate change by the Fed, the AUD<=> INR relationship shouldn't change a lot since INR would also depreciate equally, if not more.

2) If the AUD is falling because of inflation in Australia, buying real estate or gold or gold ETFs might hedge you against that depreciation, since real assets shouldn't be affected directly by inflation (it's not that straight forward though - there are typically other ways in which inflation affects these prices, e.g. : inflation might make new mortgages more expensive, causing real estate to drop)

3) If the AUD is falling because investor money is leaving Australia, you might want to invest in ETFs that mirror foreign indices (e.g. S&P 500) since those indices will move independently of the AUD. I don't know if such an ETF exists in Australia - worth checking out I guess. If you use an index that tracks the S&P 500, you would hedge against USD <=> AUD conversion (sort of), but be subject to the vagaries of the American stock market - and all the risk that it entails.

4) If the AUD is falling because the Australian central bank is lowering its benchmark rate, again investing in ETFs that mirror foreign indices might help.

All in all, there isn't a risk free way to hedge on the currency rates other than currency futures, which are generally not available to retail investors. There might be a mutual fund/ETF that may give you an equivalent exposure though.
 
  • Like
Reactions: Dubai_NewKid
1 - 7 of 7 Posts
Top