Foreign Currency Fixed Deposit

[musepepper]

Thinking of putting into AUD.

"For foreign currency deposits, bank charges and adverse exchange rate movements could erase interest earnings or reduce the original principal amount in the currency of the deposit. Once the foreign exchange rate is contracted, the Customer is bound by it and may not change or cancel the transaction"

UOB : Foreign Currency Fixed Deposit

What kind of bank charges is applicable?

 

[Arsene_Wenger]

But aud is nt 1 to 1 to sg anymre. U hav missed e boat 2 - 3 yrs back.

Monitor nzd. Thy r reducing currency value to trigger export. Might hav a chance to reach 1 to 1.

But overall i feel nt much profits frm currency even though sgd has appreciated.

The good time is at few yrs back where aud is ard 0.8 cts.

 

[musepepper]

But aud is nt 1 to 1 to sg anymre. U hav missed e boat 2 - 3 yrs back.

Monitor nzd. Thy r reducing currency value to trigger export. Might hav a chance to reach 1 to 1.

But overall i feel nt much profits frm currency even though sgd has appreciated.

The good time is at few yrs back where aud is ard 0.8 cts.

What charges do usually the bank have?
Is the return taxable?

 

[musepepper]

anyone please?

 

[Epps_Sg]

What charges do usually the bank have?
Is the return taxable?

UOB staffs have better answers i guess.

This is stated at the UOB fixed deposit website:
"You do not have to pay any fees to maintain the account
For non-resident individuals, interest earned is also exempt from tax and estate duty"

Can give them a call anytime to confirm:
"Call us 24-hour, toll-free at 1800 222 2121"

Why would u want to invest in AUD now? Speculate on AUD becoming stronger?

 

[musepepper]

Yeah, I am speculating AUD will strengthen further

 

[pompousboy]

AUD pants drop. I don't think it will appreciate any further against SGD.

 

[FP_IFA]

The spread. There is a different between the buy and sell price of AUD when the bank do a transaction for you. Check with the banker what is the different in the buy and sell rate.

For eg. if the buy rate is 1.2 while the sell rate is 1.19 current. It means you need to buy A$10000 with S$12000 while when you sell back your A$10000, you will only get A$11900.

If AUD weaken, then you loses more when you convert back.

Pro:
1. AUD has higher interest rate.
2. AUD will strengthen if global economy strengthen (particularly China).
3. AUD is a favourite currency for carry trader.

Con:
1. Bank spread is high.
2. AUD could weaken further if future outlook for China is still not good.
3. SGD is a very strong currency to go against.
4. Australia could lower their interest rate if their economy don't pick up. This will weaken AUD.
5. AUD is a carry trade currency. A drop on AUD could be very fast and furious as carry trader rush to unload AUD. Between end Jul 2008 and end Oct 2008, AUD drop from 1.34 to 0.995 in just 3 months.

 

[lousylah]

Australia, like Canada, is a commodity driven economy - mainly metals, mining and energy. they do have soft comm like agriculture.

so if you expect commodity prices to stay high or appreciate then AUD may be a good bet. higher i/r too as others pointed out. my guess is Aussie government will keep i/r stable, or even increase, as their economy is still doing very well thanks to commodity demand.

sgd has strengthen over the past 2 weeks and we are nearing the 52-week high versus AUD, amongst other currencies. might be a chance to strike - if you are up for the gamble.

my 2 cents

 

[Arsene_Wenger]

AUD is too risky...

 

[musepepper]

AUD is too risky...

Commodity price is expected to increase further.
I believe Copper will increase further, yet to hit their highest point ever in the history.

 

[NINJA91]

good if u got at least spare 10-20k to put in

 

[VisualC]

the spreads that the bank charge are this most important.

you could be losing more if they intentionally widen the spreads during conversion both ways.

for example, AUD 10k fixed deposit, they may hit you with 1.36 exchange rate with the market price is now 1.26. i.e you pay SGD 13600 for AUD 10000 deposit.


even if the AUD/SGD strengthens to 1.36 eventually, when you convert back to SGD, UOB could slap you with exchange rate of 1.26.
the AUD 10k change back to only SGD 12600.


either way, the bank earns and you lose.

 

[starbugs]

Kind of strange, because foreigners are converting to SGD to ride the gain (MAS just signaled they will maintain the exchange rate policy), but then Singaporeans are thinking of doing the opposite!

 

[Motherliquor.P]

I'm going to short AUD! Look at the commodity prices for iron ore and coal, lower and lower. Plus they lowering i/r to ensure surplus.

 

[Blue Sea]

I'm going to short AUD! Look at the commodity prices for iron ore and coal, lower and lower. Plus they lowering i/r to ensure surplus.

so how is it so far?

 

[Keverus]

lol wtf, more than 2 yrs necro..

 

[Blue Sea]

ya......investment timeframe

 

[Shiny Things]

so how is it so far?

Mate, you don't need to necromancy three-year-old threads to find out how AUD's done. Have a look at a chart; it's tanked from 1.05 to 0.80 and it's headed lower.

 

[Blue Sea]

Mate, you don't need to necromancy three-year-old threads to find out how AUD's done. Have a look at a chart; it's tanked from 1.05 to 0.80 and it's headed lower.

i know.....just wan know how ts is faring