I have been spending quite a bit of time trying to figure out what my base currency should be. I've decided to switch to Interactive Brokers and diversify my investments and trading and lump it all into one account. At IB, when you open an account, you pick your base currency. Here are my thoughts on the different choices. I would love to hear your critique of my analysis.
1. USD - No way. Long term, this is a bad one to hold. Considering all the QE and the debt problems, this is a loser in the long run.
2. EUR - I'm not sure that the Euro is here to stay. When it starts going under, the value should drop.
3. GBP, JPY - Same as USD
5. CAD - A strong currency with lots of natural resources and good finances. But, since there is so much trade with the US, it might take a beating when the USD drops.
6. CHF - Everything looks great except for their forex reserves. 27% of the $450B or so they have is held in USD. And, 48% in Euros. If these currencies drop, the CHF might not do that well relative to other currencies.
7. AUD - Finances are great, lots of natural resources and negligible forex reserves. But, AUD isn't considered a safe haven currency. So when the USD drops a lot, not sure that AUD will do that well.
I'm really trying to decide whether to hold AUD or CHF. Or maybe one of the Northern European currencies? NOK or SEK?
1. USD - No way. Long term, this is a bad one to hold. Considering all the QE and the debt problems, this is a loser in the long run.
2. EUR - I'm not sure that the Euro is here to stay. When it starts going under, the value should drop.
3. GBP, JPY - Same as USD
5. CAD - A strong currency with lots of natural resources and good finances. But, since there is so much trade with the US, it might take a beating when the USD drops.
6. CHF - Everything looks great except for their forex reserves. 27% of the $450B or so they have is held in USD. And, 48% in Euros. If these currencies drop, the CHF might not do that well relative to other currencies.
7. AUD - Finances are great, lots of natural resources and negligible forex reserves. But, AUD isn't considered a safe haven currency. So when the USD drops a lot, not sure that AUD will do that well.
I'm really trying to decide whether to hold AUD or CHF. Or maybe one of the Northern European currencies? NOK or SEK?