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Author Topic: Your preferred account denomination?  (Read 6784 times)

Offline CanadianPsycho

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Your preferred account denomination?
« on: February 27, 2018, 08:10:44 PM »
I've been thinking recently of what currencies I'd like to keep my account balances in primarily. While the USD has long been a safe haven, I've become very gun shy about storing account balances in USD because I think there's an increasing level of political and geopolitical conflict risk attached to the currency.

So, what do you folks think? Is the USD still the best option? Any other currencies you think are worth looking at?

Personally, I'm most interested in the SGD for maintaining account balances. They're far enough down on the peninsula (Southern tip of Malaysia) that any war in the Southeast Asian theater would probably leave them largely unaffected. Philippines, South Korea, Japan and Taiwan seem more likely to be within a conflict zone in the worst case. But in a much less abstract sense, Singapore just seems to be a fairly well insulated independent city state with no real danger of shifting away from its free market economy model for banking and related financial services.

I'm also partial to the GBP as a somewhat more risky play in that how Brexit finally resolves will undoubtedly have short and long term effects on the value of the currency.

Offline Eliza Abrams

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Re: Your preferred account denomination?
« Reply #1 on: February 28, 2018, 02:33:10 PM »
I usually use EUR, more out of habit than anything else.

Online reinerh

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Re: Your preferred account denomination?
« Reply #2 on: February 28, 2018, 03:02:25 PM »
sgd is a good choice i think.

one other which comes to mind is swiss frank due to its countries history.

its a tough call thats for sure. i spread it around a bit.

Offline CanadianPsycho

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Re: Your preferred account denomination?
« Reply #3 on: February 28, 2018, 03:46:24 PM »
SGD and CHF are my top two choices. Low inflation, rare budget deficits, both run by fiscally/economically sensible political bodies.

The one thing that makes me super hesitant about the Swissy though is their 2012 peg and how they handled it. They're still holding to negative interest rates which I suspect is an effort to undo the damage that so much money printing did defending that 1.20 Euro peg. But I remember in 2015 when they removed the peg just two or three days after they had publicly stated that the peg was integral to the central bank's ongoing strategy. Completely shattered their credibility.

So I'm struggling with that and wondering what to think about it relative to long term CHF holdings.

Online nwboater

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Re: Your preferred account denomination?
« Reply #4 on: February 28, 2018, 04:03:28 PM »
I think one should have the bulk of the funds denominated in the country they live if possible. Unless you fear your countries currency is going to tank for some reason.

Probably the bulk of your spending is the country in which you live. If your funds are held in another denomination that does poorly relative to your own that might hurt. Of course if the foreign one does better, well.......

Now if you spend a lot of your time overseas as some here do (like a beach in the Bhama's :) that could alter the equation.

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Offline CanadianPsycho

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Re: Your preferred account denomination?
« Reply #5 on: February 28, 2018, 04:32:54 PM »
lol, point taken nwboater.  ;D

That said, I think that's the point of trying to figure out what currency is strongest. If your home country has a very strong currency you're confident in, great and if that's good enough, even better. Personally, all I care about is which currencies might present as the most reliable over the long term so long as I can convert easily. We're forex traders. You should be able to convert to your home currency anyway before you wire. If your broker can't do that some how, best start pressing them on that.

Right now at Pepperstone, if I want to wire CAD to Canada for instance, I'll just open a CAD real money account, transfer from a USD denominated account, and then wire from the CAD account. Beats the heck out of retail bank exchange rates in Canada. That's for sure!

If getting currency back in your home country is of primary concern, I think it's just a matter of asking if there's a way for you to easily convert to your national currency on demand. If there is, I don't see what the trouble is holding currency savings in another denomination.

Side note; I'm so disappointed that Pepperstone is shuttering Canadian accounts. Canadian regulators are just awful creatures.

Offline Paul.Trafford

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Re: Your preferred account denomination?
« Reply #6 on: March 01, 2018, 10:07:58 AM »
USD is losing value all the time. I personally prefer EUR, very flexible to deal with, doesn't lose that much value over long period of time - relatively safe.

Offline Eliza Abrams

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Re: Your preferred account denomination?
« Reply #7 on: March 01, 2018, 03:40:17 PM »
After what happened with the CHF back in 2015 I am not touching that currency with a ten-foot pole.

Offline Paul.Trafford

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Re: Your preferred account denomination?
« Reply #8 on: March 13, 2018, 09:53:07 AM »
After what happened with the CHF back in 2015 I am not touching that currency with a ten-foot pole.
I think the circumstances around the 2015 Swiss Franc Crisis, were rather a political decisions, than something extra ordinary happening. If you were following the news, the government as I remember were holding the price to around 1.2, with the explanation that they are backing up the currency for stability of the country. However once they decided to stop doing that, the results were catastrophic, for those who were buying, but for the selling parties things went more than great.

Offline Eliza Abrams

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Re: Your preferred account denomination?
« Reply #9 on: March 13, 2018, 03:17:25 PM »
After what happened with the CHF back in 2015 I am not touching that currency with a ten-foot pole.
I think the circumstances around the 2015 Swiss Franc Crisis, were rather a political decisions, than something extra ordinary happening. If you were following the news, the government as I remember were holding the price to around 1.2, with the explanation that they are backing up the currency for stability of the country. However once they decided to stop doing that, the results were catastrophic, for those who were buying, but for the selling parties things went more than great.

I know all that. I just have this irrational fear of that currency and I don't want to have anything to do with it.

Offline Paul.Trafford

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Re: Your preferred account denomination?
« Reply #10 on: March 19, 2018, 03:56:03 PM »
After what happened with the CHF back in 2015 I am not touching that currency with a ten-foot pole.
I think the circumstances around the 2015 Swiss Franc Crisis, were rather a political decisions, than something extra ordinary happening. If you were following the news, the government as I remember were holding the price to around 1.2, with the explanation that they are backing up the currency for stability of the country. However once they decided to stop doing that, the results were catastrophic, for those who were buying, but for the selling parties things went more than great.

I know all that. I just have this irrational fear of that currency and I don't want to have anything to do with it.
But then you are letting your emotions taking control over your judgment, having fear of something which happen due to political decision, on which you had 0 control, shouldn't make you be scared of the currency itself. If you think about it every currency on the planet is losing value over long period of time, because they are fiat currencies. You can actually check this information online and see that it is true - there were many many many different currencies, but sooner or later they all lost value.

Offline CanadianPsycho

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Re: Your preferred account denomination?
« Reply #11 on: March 20, 2018, 07:14:08 PM »
I don't think it's "irrational" to factor a currency's historical political management into decisions about using that currency to park any wealth. I myself am rather sympathetic to Eliza's thoughts which is why I'm leaning to a preference to the SGD myself.

Offline Eliza Abrams

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Re: Your preferred account denomination?
« Reply #12 on: March 21, 2018, 03:35:09 PM »
I don't think it's "irrational" to factor a currency's historical political management into decisions about using that currency to park any wealth. I myself am rather sympathetic to Eliza's thoughts which is why I'm leaning to a preference to the SGD myself.

Thank you for the kind words.
Sometimes I feel quite silly for avoiding the CHF, but then I remember what happened back in 2015 and I'm all "Nope, not doing it."
There are plenty of currencies to choose from, I can do without the CHF.

Regarding the SGD, it has never occurred to me to use it in any way. I know so little (practically nothing) about the fundamentals around it that I'd be going into totally uncharted waters.

 

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