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Post by Fredo on Apr 18, 2016 8:16:49 GMT -5
I ran across this today and was pretty surprised to find out that both Canada and the UK have issued bonds denominated in Yuan. It seems that when the dollar goes down, there will be a replacement system in place. linkI wonder how many people know that the US dollar was so close to collapse in '78 that the US issued bonds denominated in Swiss Francs. Things haven't improved since.
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Post by Smilin' Jack on Apr 24, 2016 10:49:58 GMT -5
Bonds issued in foreign currencies is not new (my awareness is in decades) nor necessarily a harbinger of any pending disaster.
Issuers (government and non-government) will use them to attract purchasers from those countries by taking any currency risk off the table. It makes for a simpler purchase. No currency hedging needed.
And as the quote suggests, they can also be used for a bit of PR or trading relationship value.
At times, the interest rate differential between the two countries can also make their issuance and purchase attractive. For example, would you buy a Brazilian government bond issued in $US and paying 8%?
If you wanted to diversify out of the $US personally, look for a global/international government bond mutual fund with the characteristics to do that. With a 10,000 fund universe, you just may find something suitable.
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