Exchange Rates Archives | BetaShares
Four reasons to consider currency hedging your global investments

Four reasons to consider currency hedging your global investments

Unlike investing in local shares and property, investors considering exposure to international shares and commodities face the decision of whether to hedge the associated foreign currency exposure.
All else constant, if you are bullish on a global investment exposure but also bullish on the Australian dollar, it makes sense to seek a currency-hedged exposure if available,

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Is the $A cheap or expensive? An update on valuations

Is the $A cheap or expensive? An update on valuations

The Australian dollar has endured a rollercoaster ride in recent months along with the significant volatility in global risk sentiment. After reviewing a range of fundamental drivers, however, it appears the $A is currently reasonably close to fair value.
An $A valuation framework
A lot has happened since I formally reviewed my $A valuation framework in November last year.

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Why currency hedging matters!

Last year in my article Currency hedging – 3 things to consider I introduced the concept that exposure to foreign currencies can potentially be an added source of unnecessary risk to your global equities investment when looking at certain currency pairs.
Today I’m going to highlight a few specific international regions and global sectors where taking on this additional currency risk has historically been to the detriment of Australian investors due to the correlation of the underlying equities market to its domestic currency or,

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Market Insights: The Great (Currency) Fall of China

China’s exchange rate policy has led to much angst and confusion across global markets over recent months.  To their credit, the Chinese authorities have claimed they will try to maintain a “stable” value for Yuan against a basket of currencies this year.  The problem, however, is that the Chinese real exchange rate is already uncomfortably high,

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Bassanese’s Market Insights: $A now close to fair value, but likely to fall further

Following the Reserve Bank of Australia’s decision to cut interest rates last month, ongoing weakness in commodity prices, and heightened expectations that the United States Federal Reserve will raise interest rates within coming months, it’s no surprise the Australian dollar has taken a tumble of late.  Indeed, after a slight firming trend following the February RBA rate cut,

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Bassanese’s Market Insights: Fair value for the A$ now US 77c

The Australian dollar has had a notable fall in recent months – and, in fact, these falls could start to
help economic growth by making trade-exposed sectors more price competitive. But while any
such benefit associated with falls may be true at the margin, this is only a partial analysis of the
overall effect on the economy – because the A$ is falling at a time when key export commodity
prices are falling also,

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Risk-on/Risk-off investing – using currency to de-risk global exposure

With the Australian dollar seemingly on a downward trend, investor interest in gaining offshore investment exposure is growing. In our recent Portfolio Construction post, we looked at some strategies to implement ‘risk-on/risk-off’ for domestic equities exposures. In this post, we look at how currency can be used to de-risk your international share allocations.

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