FCFD

Just called PBB and found out that upon maturity convert to MYR cash at same rate when putting in deposit. So only benefit is the palatable AUD interest rates of 4.5% to 5.3% for the different mths.

Anyone got deal that takes advantage of both interest rate and forex rate??

Or can anyone advise best way to leverage strong MYR? Buy bank draft in AUD/GBP now & cash 1/3/6/12mths later?

Thanks again

This post has been edited by Muliku: May 24 2010, 09:40 AM

I think you've got the wrong information. You won't get the same rate.

Miles, thanks
just called PBB again and now advised (by a different person) that upon maturity convert to MYR cash at prevalent forex rates. this is cool.
for investment purposes, what is the best tenure 1/3/6/12mths?
thanks

Yes, can, when sum is big enough, can always ask for -100 to 150 points lower than the board rate, which they generally can give one but it depends on bank also, some do, some don;t.

No it's not. You always want for the currency to not be converted so you have the flexibility of choosing when to do it. If it so happens that the rate suddenly sinks like a stone, you want to be able to say "hold on, I don't want to convert yet". Remember what happened to AUD/MYR? lots of people got stuck when it suddenly fell off a cliff (not that that was unexpected, the only unexpected thing was how it fell so far and so fast.) It subsequently recovered, but if you were forced to convert at that time you would have lost a lot.


This post has been edited by wodenus: May 24 2010, 07:45 PM

bloody hell!, thats why it level up so fast bcos of this.

Oh look, it just fell off a cliff again.. see what I mean?

ah well, not much..shud go further.

You guys should go for dual currency investment. The interest rate is much higher than a conventional fixed deposit. I think it is a lot safer and fit your purpose of currency hedging besides earning a handsome return from interest.

Nokia2003,

I wonder if this applies here..

https://www.hsbc.com.au/1/2/personal/savings/foreign

All the major banks here do offer foreign currency account. Do check out their respective websites.

Can anyone explain what is "Dual Currency Investment"? and How to do that?
Thanks.

DCI has pairing.

For eg. RM-AUD

DCI has 1 week 2 week or 1 month, tenure depended on banks offer or customer request as well. It will cease after the period.
Current spot rate of RM-AUD is 2.73.
your strike price could be 2.73 or 2.72 (spot - 100 pips), or 2.71 as well

For illustration
2.73 - 30%
2.72 - 20%
2.71 - 10%

Above is the offer of interest rate given with strike price based on 1 week tenure (can be 2 week or 1 month as well), but shorter duration, they give better rate. Interest rate given is differ each day depended on the volatility of forex market, last week, when there is severe move in currency market, there is once DCI carried 70% as well.

Let say you decide to go in 2.73 - 30%
After 1 week, if the spot rate of RM-AUD is 2.74, then your RM won't be converted to AUD, but you will get 30% pa interest rate on your invested money.
If the spot rate is below the strike price of 2.73, your RM will be converted to AUD at 2.73, with together the 30% pa interest rate.

Based currency can be both way i.e. RM or AUD.
As if the money is converted to AUD, you could do the reverse aka base currency of AUD-RM DCI as well.

(deleted)

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Added on May 26, 2010, 6:02 pmThey have a minimum investment of Rm500,000 or something like that.



This post has been edited by wodenus: May 26 2010, 06:02 PM

No way ! It is much much lower than that.

I can't remember, I did remember thinking I'd be better off with other forms of investment if they were going to require hundreds of thousands.

This post has been edited by wodenus: May 26 2010, 07:44 PM

I am not very sure myself either but it definitely is a lot less. Even with all those structured products which they state in their fliers that the minimum investment is RM250,000, in reality it is much lesser then that.

i don't really like DCI, you get the downside of unfavourable forex movements but you don't get the upside, ya you might get better interest rates than RM but you'll get it anyway when you convert to say AUD

so perhaps it's simpler and easier if you just convert straight to AUD and get the higher interest

Too bad currency/forex swaps are not common here in Malaysia for retail investors, or not it will be easy to hedge our foreign investments.

This post has been edited by gark: May 27 2010, 02:17 PM

my housemate was just telling me yesterday that HSBC Australia is currently doing 6.1% for only 4 months.

he was rather surprised because HSBC doesn't usuallyoffer the best rates as compared to its rivals.

just FYI of course.

have a good day everyone!

This post has been edited by nokia2003: Jul 2 2010, 04:47 PM