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I have opened an account to buy some US priced ETFs not available on the ASX but with the Australian dollar, at say, 70c have I got a problem?
Or am I correct that if the spread doesn’t change, there will be no downside?
However if the spread increases (Aussie dollar goes down against the US dollar) after I buy, does my paper profit deteriorate – and if the spread decreases my position improves – or is it the other way around?
A: I don’t understand the question.
If you already have USD, you don’t really care about what the AUD does in the very short term.
When you want to bring the USD back, if the AUD has gone down (say to 0.65 US cents), then you will be better off and have more AUD. Conversely, if the AUD has risen, then you will get fewer AUD when you convert back.
If you don’t have the USD yet, then you haven’t lost anything in AUD terms – it is just that the opportunity to make money from a falling currency might have diminished a touch.
