Strategies for saving and investing in multiple foreign currencies
If you want to use that money and maybe don't have the time to wait a few years if things should go bad, than you will definitely want to hold a good bunch of your money in the currency you buy most stuff with (so in most cases the currency of the country you live in) even if it is more volatile. Evaluating the value of currencies is always difficult because you are usually at the mercy of a central bank that can print new currency on a whim. I am trying to diversify my currency holdings but it is difficult to open foreign bank accounts without actually being in the foreign country.  Any ideas here? You don't indicate which currencies you own but I would stick with your diversified portfolio of currencies and add some physical assets as a hedge against the fiat currencies. The bad news is that foreign exchange is ultimately somewhat unpredictable, and analyzing the risk of these things is not particularly straightforward. I'm afraid I don't know what tools exist to analyze these, aside from suggesting you look at textbooks for financial analysis classes. The good news is that there are other people who deal with multiple currencies (international businesses, for instance) who worry about the same thing. As such, you can take a look at foreign exchange rate futures and related instruments to estimate what the market as a whole currently expects the values to do. The prices of these futures could be a useful starting point.
"Even though ""when the U.S. sneezes Canada catches a cold"", I would suggest considering a look at Canadian government bonds as both a currency hedge, and for the safety of principal — of course, in terms of CAD, not USD. We like to boast that Canada fared relatively better (PDF) during the economic crisis than many other advanced economies, and our government debt is often rated higher than U.S. government debt. That being said, as a Canadian, I am biased.  For what it's worth, here's the more general strategy: Recognize that you will be accepting some currency risk (in addition to the sovereign risks) in such an approach. Consistent with your ETF approach, there do exist a class of ""international treasury bond"" ETFs, holding short-term foreign government bonds, but their holdings won't necessarily match the criteria I laid out – although they'll have wider diversification than if you invested in specific countries separately." A currency that is strong right now is one that is expensive for you to buy. The perfect one would be a currency that is weak now but will get stronger; the worst currency is one that is strong today and gets weak. If a currency stays unchanged it doesn't matter whether it is weak or strong today as long as it doesn't get weaker / stronger. (While this advice is correct, it is useless for investing since you don't know which currencies will get weaker / stronger in the future).  Investing in your own currency means less risk. Your local prices are usually not affected by currency change. If you safe for retirement and want to retire in a foreign country, you might consider in that country's currency. "Currency, like gold and other commodities, isn't really much of an investment at all. It doesn't actually generate any return. Its value might fluctuate at a different rate than that of the US dollar or Euro, but that's about it. It might have a place as a very small slice of a basket of global currencies, but most US / European households don't actually need that sort of basket; it's really more of a risk-management strategy than an investment strategy and it doesn't really reflect the risks faced by an ordinary family in the US (or Europe or similar). Investments shouldn't generally be particularly ""exciting"". Generally, ""exciting"" opportunities mean that you're speculating on the market, not really investing in it. If you have a few thousand dollars you don't need and don't mind losing, you can make some good money speculating some of the time, but you can also just lose it all too. (Maybe there's a little room for excitement if you find amazing deals on ordinary investments at the very bottom of a stock market crash when decent, solid companies are on sale much cheaper than they ordinarily are.)" Gold is traded on the London stock exchange (LSE) and the New York stock exchange (NYSE) under various separate asset tickers, mainly denominated in sterling and US dollars respectively.  These stocks will reflect FX changes very quickly.  If you sold LSE gold and foreign exchanged your sterling to dollars to buy NYSE gold you would almost certainly lose on the spreads upon selling, FX'ing and re-buying. In short, the same asset doesn't exist in multiple currencies.  It may have the same International Securities Identification Number (ISIN), but it can trade with different Stock Exchange Daily Official List (SEDOL) identifiers, reflecting different currencies and/or exchanges, each carrying a different price at any one time. "Okay - but that's about gold as an investment in today's world, and during  an extremely unstable financial situation.  Many other types of investments could be used similarly. Those who advocate gold as a hedge don't advocate buying it during a crisis, they advocate keeping some as part of an investment strategy... but again, that's gold as gold, not gold as currency.  Leveraging your investments based on current financial situations is what investing is about.   Gold as a medium for currency is a totally different thing.   What you just described would be called ""arbitrage"" - in moving markets (or other situations I guess) looking for no-lose situations where you can trade things around and increase your net value doing it.    it helps stabilize markets - as people take advantage of this situation it counters the effect and self-corrects... think about it ;)" "HSBC, Hang Seng, and other HK banks had a series of special savings account offers when I lived in HK a few years ago.  Some could be linked to the performance of your favorite stock or country's stock index. Interest rates were higher back then, around 6% one year.  What they were effectively doing is taking the interest you would have earned and used it to place a bet on the stock or index in question.  Technically, one way this can be done, for instance, is with call options and zero coupon bonds or notes.  But there was nothing to strategize with once the account was set up, so the investor did not need to know how it worked behind the scenes... Looking at the deposit plus offering in particular, this one looks a little more dangerous than what I describe.  See, now we are in an economy of low almost zero interest rates.  So to boost the offered rate the bank is offering you an account where you guarantee the AUD/HKD rate for the bank in exchange for some extra interest.  Effectively they sell AUD options (or want to cover their own AUD exposures) and you get some of that as extra interest.  Problem is, if the AUD declines, then you lose money because the savings and interest will be converted to AUD at a contractual rate that you are agreeing to now when you take the deposit plus account.  This risk of loss is also mentioned in the fine print. I wouldn't recommend this especially if the risks are not clear. If you read the fine print, you may determine you are better off with a multicurrency account, where you can change your HK$ into any currency you like and earn interest in that currency. None of these were ""leveraged"" forex accounts where you can bet on tiny fluctuations in currencies.  Tiny being like 1% or 2% moves.  Generally you should beware anything offering 50:1 or more leverage as a way to possibly lose all of your money quickly. Since you mentioned being a US citizen, you should learn about IRS form TD F 90-22.1 (which must be filed yearly if you have over $10,000 in foreign accounts) and google a little about the ""foreign account tax compliance act"", which shows a shift of the government towards more strict oversight of foreign accounts." Today typically a Business needs to hold accounts in more than one currency. Banks in certain countries are offering what is called a dual currency account. It is essentially 2 accounts with same account number but different currency. So One can have an account number say 123456 and have it in say AUD and USD. So the balance will always show as X AUD and Y USD. If you deposit funds [electronic, check or cash] in USD; your USD balance goes up. Likewise at the time of withdrawal you have to specify what currency you are withdrawing. Interest rates are calculated at different percentage for different currencies.  So in a nutshell it would like operating 2 accounts, with the advantage of remembering only one account number. Designate a particular currency as default currency. So if you don't quote a currency along with the account number, it would be treated as default currency. Otherwise you always quote the account number and currency. Of-course bundled with other services like free Fx Advice etc it makes the entire proposition very attractive. Edit: If you have AUD 100 and USD 100, if you try and withdraw USD 110, it will not be allowed; Unless you also sign up for a auto sweep conversion.  If you deposit a GBP check into the account, by default it would get converted into AUD [assuming AUD is the default currency] "I found an answer by Peter Selinger, in two articles, Tutorial on multiple currency accounting (June 2005, Jan 2011) and the accompanying Multiple currency accounting in GnuCash (June 2005, Feb 2007). Selinger embraces the currency neutrality I'm after. His method uses ""[a]n account that is denominated as a difference of multiple currencies... known as a currency trading account."" Currency trading accounts show the gain or loss based on exchange rates at any moment.  Apparently GnuCash 2.3.9 added support for multi-currency accounting. I haven't tried this myself. This feature is not enabled by default, and must be turned on explicity. To do so, check ""Use Trading Accounts"" under File -> Properties -> Accounts. This must be done on a per-file basis. Thanks to Mike Alexander, who implemented this feature in 2007, and worked for over 3 years to convince the GnuCash developers to include it. Older versions of GnuCash, such as 1.8.11, apparently had a feature called ""Currency Trading Accounts"", but they behaved differently than Selinger's method."