How to capture higher global interest rates

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date How to capture higher global interest rates rajiv1 11-25-2006  Re: How to capture higher global interest rates joetaxpayer 11-25-2006  Re: How to capture higher global interest rates rajiv1 11-26-2006  Re: How to capture higher global interest rates Shhhh 11-26-2006  Re: How to capture higher global interest rates Dave Dodson 11-26-2006  Re: How to capture higher global interest rates beliavsky 11-27-2006
Posted by rajiv1 on November 25, 2006, 10:36 am Besides emerging market bond funds, what are the ways to capture higher interest rates abroad. In London, for instance, banks are offering 6% interest rates on savings account. And MExican Central Bank yesterday maintained their interest rate at 7%. I am not worried about currency exposure as I think the dollar would stablize or even decline somewhat here. Posted by joetaxpayer on November 25, 2006, 11:13 am rajiv1 wrote: > Besides emerging market bond funds, what are the ways to capture higher > interest rates abroad. In London, for instance, banks are offering 6% > interest rates on savings account. And MExican Central Bank yesterday > maintained their interest rate at 7%. I am not worried about currency > exposure as I think the dollar would stablize or even decline somewhat > here. > The market says otherwise. If the one year rate in the US is 5%, and in Mexico, it were 10%, the market is making a statement that the dollar is rising against the peso. Looking at the currency futures contracts can confirm this. Any anomalies in the exchange rate vs interest rate are quickly arbitraged away for a small profit. A currency that's rising against the dollar will naturally have a lower interest rate for a short term instrument. JOE JoeTaxpayer.com Posted by rajiv1 on November 26, 2006, 11:14 am > The market says otherwise. > > If the one year rate in the US is 5%, and in Mexico, it were 10%, the > market is making a statement that the dollar is rising against the peso. > Looking at the currency futures contracts can confirm this. Any > anomalies in the exchange rate vs interest rate are quickly arbitraged > away for a small profit. > A currency that's rising against the dollar will naturally have a lower > interest rate for a short term instrument. What if you are taking the opposite call. Say, I am personally bearish on the dollar and want to take a view to have some non dollar assets. What's the best way to do it besides buying a mutial fund. Posted by Shhhh on November 26, 2006, 12:24 pm I know your not exactly looking for mutual funds... but this would be right up your alley... the Merk Hard Currency Fund... MERKX Shhhh >> The market says otherwise. >> >> If the one year rate in the US is 5%, and in Mexico, it were 10%, the >> market is making a statement that the dollar is rising against the peso. >> Looking at the currency futures contracts can confirm this. Any >> anomalies in the exchange rate vs interest rate are quickly arbitraged >> away for a small profit. >> A currency that's rising against the dollar will naturally have a lower >> interest rate for a short term instrument. > > > What if you are taking the opposite call. Say, I am personally bearish > on the dollar and want to take a view to have some non dollar assets. > What's the best way to do it besides buying a mutial fund. > Posted by Dave Dodson on November 26, 2006, 3:09 pm rajiv1 wrote: > Besides emerging market bond funds, what are the ways to capture higher > interest rates abroad. Fidelity New Markets Income Dave Similar Threads Posted plan for higher income tax rates October 22, 2008, 11:13 am Has the Fed Already Lowered Interest Rates? August 16, 2007, 8:06 am How hedge interest rates? April 6, 2008, 9:15 am Finding the best savings interest rates May 27, 2007, 8:14 am FED will continue to drop interest rates August 20, 2007, 8:43 am Historical data for interest rates given by money market funds? October 18, 2008, 8:25 am Higher income = higher credit score? October 4, 2006, 5:13 pm Vanguard's new Global Index Fund April 8, 2008, 8:55 am higher rate of return December 5, 2007, 6:36 am old retirement acct: total withdrawal vs higher annuity? November 14, 2008, 12:52 pm