Best Offshore Currency for Next 2 Years

[Lizard]

Hi. Looks like the team on Forex are seeing some interesting action! I realise most of you trade on the short term trend, but am wondering if you have any recommendations for best off-shore currency to be in for the next year or two now that the NZD finally looks to be heading down?

Thanks,

[Xerof]

Hmmm, hard enough picking beyond the next 2 minutes Lizard, let alone 2 years, but for what its worth, you'd get more bang for your buck buying USD, to be frank. Most of the other currency crosses are reasonably highly correlated, i.e if NZ is going down, usually its following EUR, GBP, AUD moves in tandem, so those crosses tend not to move as far. It can of course occasionally make it's own moves independently of the others but in my experience, doesn't happen that often.

Don't know if that'll hold as a strategy for 2 years, but should be good for the next 6 months IMO. USD looks good for the moment, but I still expect it to revert to downtrend into 2006, so then you simply bring your money home again, if it turns out that way.

FX traders turn views on a dime, as you can imagine, so comments made on best endeavours basis, E&OE, DYOR, etc etc, but hope that assists


Anybody else brave enough to comment?

Xerof

[Lizard]

Thanks Xerof. I realise FX is not the easiest to pick. I hold a similar (but less expert!) view on USD. Any thoughts on Yen? That is another option I was entertaining...

Cheers,

[Xerof]

Funny you say that - I was going to suggest that as an alternative, due to China situation, but not confident enough to give informed opinion on China impact on YEN. From what I read about China, it may end up being a fizzer of a reval anyway, so prefer to stick with USD view

Longer term predictions for USD/YEN seem to be flat to higher anyway, so comes into the correlation category IMO

Besides, you earn a little more interest on USD than Yen, and it'll get better in coming months too

Xerof

[Lizard]

Thanks again Xerof. Have broadened my exposure to both Yen and USD for now.
Cheers, Liz