5 Ways You Can Invest in Foreign Currency


Forex (Foreign Exchange Market) is a 24-hour-a-day market that trades world currencies. For some, it’s just a means of exchanging one currency for another. International enterprises that drive business globally depend on these markets to trade currencies worldwide. The market is also inhabited by dealers who bet on the activities of currencies comparable to one another.

Forex currency investments and the forex market, in general, function between people represented by brokers, between banks and brokers, and between banks. But as an individual, you may be curious to learn of ways you can invest in a forex investment fund.

Here are five ways you can partake in this market.

1. Common Forex Trading

As an Investor, you can open an account with a forex broker. This simple act allows you to exchange currencies on a global scale. However, there are numerous distinctions in how this market works when compared to Canadian stock exchanges:

  1. The currencies are exchanged in pairs; an investor hopes one will rise, long, and the other will fall, short.
  2. No regulated currency trades and no prominent financial institutions for transactions are involved.
  3. No uptick rule for bearing short positions.
  4. No upper limit on position size.
  5. Currency retailers typically make money on the bid-ask spread instead of commissions.

2. Savings Accounts and CDs

CDs are under the control of trade rate oscillations but offer higher interest rates compared to dollar-denominated CDs. As the CD develops, investors receive fewer dollars than financed if the dollar strengthens relative to the foreign currency.

3. Foreign Bond Fund Investments

Certain mutual funds invest in foreign government bonds. Such mutual funds earn interest designated in foreign currency. Furthermore, if the foreign currency’s value increases compared to regional currency, the interest earned grows when restored to the initial regional currency. Foreign bond investing permits investors to determine their preferred risk level and seek extra yield.

4. International Enterprises

Numerous stockholders indirectly partake in forex markets through company ownership in corporations that make noteworthy trade in foreign nations. The earnings and gains emanated from overseas processes are increased if the foreign currency rises relative to the dollar. This process happens because those profits are altered back to dollars for monetary documenting objectives, and a more robust foreign currency will generate more dollars.

5. ETNs and ETFs

Exchange-traded notes (ETNs) and exchange-traded funds (ETFs) are exchanged like stocks and can be a method for investing in currencies without requiring trading the forex. With most brokerages and a traditional investment account, investors can purchase admission to currency ETFs. ETNs are comparable to corporate bonds; however, they usually have an equivalent exposure as ETFs to the currency market.

In Conclusion

There are numerous ways you can invest in the forex market. The best method for you depends on your comfort level and risk tolerance. At CWS Capital, we are registered as an Exempt Market Dealer in each province across Canada. We offer forex investment funds to help you gain exposure to the 24-hour, 5 trillion dollar foreign exchange market.

If you’re interested in learning more, contact us today to see if you’re eligible for foreign exchange currency investing services in Edmonton.