How to invest in currencies: from the exchange desk to the smartphone

Have you ever thought about how to invest in currencies from other countries? With the devaluation that the real has suffered in recent months, one way out is to explore the international exchange market. From British Pound to Indonesian Rupiah, all currencies are traded without a break.

Through the cell phone, applications such as MetaTrader 4 allow you to analyze and invest in dozens of currency pairs. Since the beginning of the year, the dollar has risen 21% against the Turkish lira, 16% against the Chilean peso, 10% against the South Korean won and 6% against the real.

Why has the dollar been strengthening?

The soaring energy prices around the world is raising expectations that the US Federal Reserve will act sooner than expected to curb inflation. A rise in the US interest rate tends to appreciate the dollar.

A barrel of oil has reached its maximum price in seven years, natural gas has just reached its historic peak in Europe and coal has also skyrocketed. In addition to the dollar, currency traders view the historic expansion of Asian economies with interest. China has the second largest GDP in the world and could surpass that of the United States this decade.

A lot is said about Chinese exports, but the country also imports a lot and you should think about that when you are thinking about how to invest in currencies. The list below presents the 20 countries with the biggest trade surpluses against China in the year 2019:

• Australia: $72 billion
• South Korea: $63 billion
• Brazil: US$ 44 billion
• Saudi Arabia: $30 billion
• Japan: $28 billion
• Germany: $25 billion
• Switzerland: $23 billion
• Angola: US$ 21 billion
• Malaysia: $19 billion
• Oman: $16 billion
• Iraq: $14 billion
• Chile: US$ 12 billion
• Russia: $11 billion
• Ireland: $10 billion
• Kuwait: $10 billion
• South Africa: $9 billion
• Turkmenistan: $8 billion
• New Zealand: $7 billion
• Peru: $7 billion
• Qatar: $6 billion

Returning to the forex market, also known as the Forex, the panic at the beginning of the Covid-19 pandemic caused significant volatility. Bets for and against the dollar, at the right time, generated significant profits.

How to invest in currencies and why is it worth opting for the dollar?

The dollar is considered the safe haven in extreme risk situations and this time was no different. From January to mid-March 2020, the currency soared against the British Pound (13%), Australian Dollar (19%), Canadian Dollar (11%) and other currencies. But as the fear subsided, the value of the dollar fell.

Another crisis with a strong effect on the exchange rate was the economic collapse of the United States that began in 2008. In a few months the euro, real, yen, Swiss franc and Australian dollar soared by more than 10%. The failure of hundreds of American banks – including Lehman Brothers and Bear Sterns – scared a lot. The euro hit a record high of 1,6038 against the dollar.

Foreign investors have always taken advantage of the volatility of the real and the currencies that preceded it. Brazilians took note and are now looking outside carefully when thinking about how to invest in currencies.

See also other features

One of the effects that is causing a shortage of products in the market is the poverty of chips in the market. And you need to think about it before you even understand how to invest in coins. Check out like this US government investment should help with this problem: