With the rates of interest in the euro area being persistently low, investors are forced to seek new alternatives for increasing asset value. One of the current opportunities is currency deals. We would therefore like to draw your attention to this highly topical area.

According to Matej Hrivnak, private banker at Erste Private Banking, currency trades can generate higher yields and provide protection for deposits and investments against potential negative developments in the euro area. On the other hand, there is also a higher risk of loss involved. However, this risk can be mitigated by currency diversification, i.e. by allocating the portfolio among various currencies. “As part of currency diversification, we are able to offer a wide range of foreign currencies, including the US dollar, the Czech crown, the Russian ruble, the Norwegian crown, the Polish zloty and other world and regional currencies," Hrivňák said. According to him, one successful currency deal per year can be enough to generate interesting yield or provide security against future uncertainty.

When considering the available options and when selecting specific currencies, investors can be greatly helped by the CEE FX report drawn up by a team of Erste Group analysts led by Juraj Kotian, Erste Group chief economist for Central and Eastern Europe. The report provides a regular overview of currency developments in the countries of Central and Eastern Europe covered by the Erste Bank Group. The report, issued on quarterly basis, provides current estimates for the next twelve months and includes graphs comparing both past and forecasted performance, Juraj Kotian added.

The current CEE FX Report in English is available online.

You can also receive regular reports and analyses of the Erste Group automatically, just sign up for free.

Warning:

Currency deals as financial derivatives are complex financial instruments with a high level of risk. Before investing in currency transactions, potential investors should consider all the risk factors associated with investing into financial derivatives.