MYR Vs USD, Foreign Exchange Risk
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 Sep 14 2009, 04:04 PM, updated 17y ago
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#1
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Junior Member
55 posts Joined: Aug 2009 
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Hi,
I believe many of you here are investing in US stocks through your brokers. I was wondering, for those who are investing in US stocks, did you take into account the foreign exchange risk incurred? If you do, i would like to know your views on the strength on MYR vs USD, please state your case/support for your opinion, thanks. Purpose of this tread is to know the sentiment of the USD and MYR in this forum. |
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Sep 15 2009, 08:43 AM
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#2
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Junior Member
55 posts Joined: Aug 2009
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QUOTE(danmooncake @ Sep 15 2009, 02:12 AM) Same here (already hedge). The exchange rate doesn't bother me much eventho USD looks like it is going down. Just a stupid question here, how you guys hedge your USD? what type of derivatives you guys use?Last year before the market crash, USD 1 = 3.2 RM, Now, USD 1 = RM 3.5. USD still wins. If USD drops below RM3, then I'll considered hedging more to RM side but unlikely since our govt favor cheaper Ringgit.  |
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Sep 15 2009, 03:28 PM
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#3
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Junior Member
55 posts Joined: Aug 2009
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QUOTE(moody5 @ Sep 15 2009, 12:25 PM) Malaysia are net exporters..cheaper Ringgit is better for us.. But some argued that a country cannot be prosperous with a weak currency. What i am trying to say here is that, it is beneficial to those exporting companies but not to the economy as a whole if RM keeps on depreciating against other currencies. |
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Oct 22 2009, 11:27 AM
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#4
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Junior Member
55 posts Joined: Aug 2009
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QUOTE(moody5 @ Sep 16 2009, 11:13 AM) On the economy wise, BNM (the central bank) will be watching on our economy progression and they will come out with policy to sustain our economy. What i mean is that a depreciating dollar for a country, (regardless which country) will help in reducing the budget deficit of a country (ceteris paribus), exports would increase...bla bla bla.......i didnt say depreciating USD = MYR.Remember yr 2008, the worldwide meltdown on economy, BNM lowered our Interest rate. It is on of the tools that BNM to sustain our economic. With lower interest rate, ultimate purpose is to boost spending and invest to sustain our economy. Another effects of low interest rate, people will do carry trades which caused the depreciation of MYR against the currency which they have higher interest rate. On the cuti cuti malaysia plan, with a depreciating MYR (or cheaper MYR), it bring lucrative profits on traveling business into Malaysia. depreciating the USD will lower their budget deficit (which is sort of your point). I don't get you on this line. Depreciating the USD = a depreciated USD or depreciated MYR the budget deficit of whom? Malaysia or USA? All i am saying is that a country cannot prosper with a depreciating currency. though it helps in budget deficit side of the equation, but the standard of living of the country will eventually fall due to weaker domestic currency. |
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