How to play currencies with ETCs

Exchange-traded currencies are trackers designed to appeal to high-net-worth individuals who want an easy way to deal in a range of global currencies. Paul Amery explains how to use them.

With currency volatility on the rise, there's a handy new tool to manage foreign-exchange (FX) exposure exchange-traded currencies (ETCs). These trackers are designed to appeal to high-net-worth individuals who want an easy way to deal in a range of global currencies, but who don't have the scale to set up several accounts or to deal in the wholesale market. If you'd like to park your money in yen for a while, for example, and want an alternative to suffering the rip-off currency and interest rates offered by your bank, ETCs may be for you. But if you see yourself as the next George Soros and want to trade foreign exchange short-term and with high leverage, they're not.

Currently, ETF Securities' London-listed ETCs offer long or short exposure to nine FX 'majors' against the US dollar: Australian, Canadian and New Zealand dollars; sterling; euros; Swiss francs; yen; and Norwegian and Swedish kroner.

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Paul Amery

Paul is a multi-award-winning journalist, currently an editor at New Money Review. He has contributed an array of money titles such as MoneyWeek, Financial Times, Financial News, The Times, Investment and Thomson Reuters. Paul is certified in investment management by CFA UK and he can speak more than five languages including English, French, Russian and Ukrainian. On MoneyWeek, Paul writes about funds such as ETFs and the stock market.