Posted by forex at 3:41 AM
Read our previous post
1. Buy a certificate of deposit (CD) that is denominated in euro currency. It is possible to purchase these in countries outside the euro zone; however, the CD is still issued by a London-based authority in most cases. A duro CD acts much like a CD using domestic currency, except that in most cases the maturities are shorter in duration. A CD using domestic currency can last years, but duro CDs usually mature after less than one year. Regardless of the location where the euro CD is purchased, the Bank of England regulates their guidelines, so policies and interest rates may vary from those in your native country.
2. Purchase shares of the FXE exchange-traded fund (ETF) using a conventional brokerage account. Stock markets often list and trade ETFs that cover a wide range of investment vehicles not associated with the equity markets. The FXE fund tracks the value of the euro and offers investment returns similar to the holdings of euro currency or CDs. Any standard stockbroker account, including most online brokers, will offer access to this ETF. This is a convenient alternative for those who do not ordinarily engage in currency investing. The shares trade like stock and may be bought and sold at any time. There are no contracts or early withdrawal penalties and, unlike a mutual fund, an ETF does not carry significant management fees. For all practical purposes the transaction is identical to buying stock.
3. Open a Forex account if you wish to directly trade units of euro currency. Currency exchange trading via Forex is a highly leveraged way to gain exposure to the euro. Most Forex accounts carry margin ratios of only 1%, thus it is possible to purchase up to one million units of euro currency for the same capital as would normally allow only 10,000 units to be exchanged. For traders with strong confidence in their strategy, this is the most rewarding way to speculate on the euro, but the risks often outweigh the benefits for most traders.