GBP v USD performance over the past 6 months

[artg]

Most stock markets have declined by 20% or more nice the start of the year but those whose investments are in £ have been shielded as the £ has lost a lot of value against the dollar.
From reading about this, it appears this is because the dollar is seen as a safe haven. Is there any investment or fund I could buy that would benefit me as a UK investor if the dollar started to weaken against the pound. I am assuming if the dollar weakened my investments would start to lose value.
Thanks

 

[missestexas]

@artg It's not just that the USD is seen as a safe haven, but also that Truss has just taken a dump on the UK credit rating by borrowing more than the government plan to bring in - doubling down by giving tax breaks as well. (imagine giving someone a credit card who's a reckless spender, you'll want to downgrade their credit rating).

UK interest rates haven't been bumped as high as the US rates, so that's strengthened the dollar more than the pound.

Secondly inflation is sky high, so the pound is weakening more.

Weak currency only matters if you're an exporting country.

 

[resjudicata]

@missestexas Weak currency matters a lot to anyone who travels

 

[missestexas]

@resjudicata Sorry. My point wasn't clear, weak currency is only a benefit if you're an exporter.

The UK is definitely not an exporter, and it hasn't been for a long time.

 

[shiercs]

@artg I guess by holding GBP you are protected against falling USD? You can buy more USD at a lower price if it were to fall. Otherwise you can bet against usd which is very risky (using CFD's).

 

[graciegirl]

@artg I'm not an investor but as someone about to go on holiday to the States I'm dismayed at the current exchange rate! £1 / $1.10 I know, first world problems.

I remember the heady days of £1 / $1.70

 

[sashieng]

@artg Any global investment, or more specifically USD investment would have protected you.

 

[raine93]

@artg The dollar is the world reserve currency.

The pound has higher inflation

Brexit is a disaster with the UK not been in a great position to get favorable terms on trade deals.

The 30 year fixed rate is the most common type of mortgage in the states while variable rate is here.

The FED has been more aggressive with rate hikes and is in a position to keep been aggressive.

The dollar will just keep getting stronger I'm afraid.

As for your question

If you buy an 0Z of gold in pounds and the pound gets devaluded relative to the dollar, you will be protected from the currency devaluation because the price of gold will raise quicker in terms of pounds than dollars.

 

[margoelise]

@artg I feel like a GBP Hedged ETF is perhaps a decent option for the first time in a long time.

I cannot see USD weakness any time soon. But I also can't see the GBP going significantly lower, and nor can I see it staying this weak over a longer time horizon.

 

[dpowerz]

@artg FTSE250 is probably a sensible choice for that. You'd want to avoid the FTSE100 as it has lot of international earnings.

 

[logmantm]

@dpowerz FTSE 250 has been dropping far more than FTSE 100. Any gains based on currency for the 250 will be wiped by further drops

 

[dpowerz]

@logmantm

FTSE 250 has been dropping far more than FTSE 100

That's the past. But it makes sense as the pound has fallen and the FTSE100 has international earnings.

Any gains based on currency for the 250 will be wiped by further drops

I'd agree.

But that wasn't the question. The question was in a nutshell "what can I buy if the pound is going to rise"

Is there any investment or fund I could buy that would benefit me as a UK investor if the dollar started to weaken against the pound

 

[aboutantichrist]

@dpowerz Isn't international earnings a good thing if the £ is low? Then when converter to £, the international earnings are worth more than before.

 

[dpowerz]

@aboutantichrist

Is there any investment or fund I could buy that would benefit me as a UK investor if the dollar started to weaken against the pound

I thought the OP was asking for what to buy if they anticipate the pound increasing

 

[inhope]

@artg Me personally only hold US based assets denominated in USD. I don't see GBP or EUR getting stronger against the dollar anytime soon. Plus I find European markets will likely take a bigger beating during the (likely) coming downturn.

 

[nontheologian]

@inhope Is this right? With individual shares you don't get much choice, but if you want to hold an S&P500 fund (say) you could buy USD and buy a USD based fund and then sell it to USD and rebuy GBP. Typically you'd pay currency exchange fees at both ends. Alternatively by buying a GBP version of the fund the exchange rate is built into the price and while the price fluctuates with the GBP:USD rate you don't pay fees at either end.

 

[laternonjuror]

@nontheologian This is my understanding too, you can buy GBP denominated US funds either with or without an FX hedge.

No point paying an FX broker fee when you can access GBP denominated funds that don't have any FX hedge.

 

[mom3222]

@artg Probably not a time to bet against the dollar

 

[artg]

@mom3222 I was thinking longer term…

 

[lifeaintagame]

@artg Just don't get involved in currencies at all.

Go with a global index fund and ignore it.