Looking at all of the major currencies I am really struggling to find one which I am comfortable being long.
The US couldn’t afford their debt interest repayments when interest rates were at zero! Bit of an exaggeration but you know what I mean. Plus the political situation seems so divided, there seem to be more risks than upside for the USD in 2023.
With war raging in eastern Europe, I cannot justify being long European currencies to any significant extent and the JPY lost its ‘risk off’ status last year and I’m not sure where it’s headed.
So that leaves me two options; one risky, one less so.
The less risky option is to stay in my home currency, the AUD. There are undoubtedly some geo-political risks but the domestic political and financial situations are stable and for now, I’d rather be long AUD than any other of the majors.
The risky option is to build a portfolio of emerging currencies, particularly Asian and South American. Unfortunately I don’t have the energy or risk appetite anymore to manage the swings and roundabouts because this could well be the year of the underdog.