How much do you know about foreign currency investment? When the foreign exchange market doesn’t go along with your expectations, there’re some plans to help you.
Let’s say, previously, you’ve had HKD as the deposit currency and GBP as the linked currency for 7 days. After that, GBP has depreciated relative to HKD and you've got your principal and interest in GBP.
But now, if you don’t need the GBP and you’re pessimistic about GBP’s future. To increase your interest income, you may want to know more about the following examples.
If you hold GBP and expect GBP will continuously depreciate against other currencies, one of the approaches is to choose GBP as the deposit currency. And then link to other foreign currency.
You can choose different investment periods ranging from one week to three months and enjoy the flexibility to choose from a range of linked currencies, including HKD, USD, AUD, EUR, JPY, CAD, CHF, NZD, and CNY. To choose the right linked currency, it’s important to understand the relationships between different currencies as the market is greatly affected by currency policies.
Let’s suppose you choose GBP as the deposit currency and link against HKD. On the maturity date, you’ll receive the maturity payment (principal + interest) in either the linked currency or the deposit currency at the agreed exchange rate.
If GBP depreciates as predicted, at the time of settlement, the exchange rate of GBP/HKD is lower than the agreed exchange rate, you’ll receive the principal and interest in GBP. Conversely, if GBP appreciates, at the time of settlement, the exchange rate of GBP/HKD is equal to or higher than the agreed exchange rate, the maturity payment you receive will be converted into the linked currency based on the agreed exchange rate.
Please note that exchanging your deposit into the linked currency is equivalent to selling GBP (deposit currency) based on the agreed exchange rate. You may bear losses due to a drop in the exchange rate.
To know more about how currency-linked deposits work, view ouror learn more about the .
If you’re looking for another approach, consider subscribing to a foreign currency investment deposit that guarantees 100% of the principal at maturity.
You can select your preferred currency combination and choose GBP as the deposit currency. The investment period can be as short as one month. The minimum online subscription amount is as low as HKD 5,000. Regardless of how the linked currency performs at maturity, 100% of the principal and the minimum return are guaranteed.
Checkand know more about the .