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The Euro is trending low, and I have long term plans which might involve living there. I have a German girokonto (which costs me an outrageous Eur5/mo to hold), but no European trading account.

Does anyone know of tricks to use a Canadian account (e.g., iTrade) to get exposure or shift money into Euros without insane exchange commissions?

Unhedged index securities or securities offered in Euros and Dollars would be ideal.

  • Can you not just short the USD:EUR pair in a regular brokerage like interactive brokers? That way you get exposure to Euros. You don't hold the actual currency, but you still profit when Eur rebounds. – Victor123 Apr 8 '15 at 19:58
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If you are restricting yourself to Scotiabank (Both retail banking and iTrade), your choices are pretty limited.

If you are exchanging more than CAD$25,000 to EUR without margin, you can call Scotiabank and ask for a quote with much lower spread than the published snapshots.

The closest ETF that you are talking about is RWE.B on TSX, which is First Asset MSCI Europe Low Risk Weighted ETF (Unhedged). You will be exposed to huge equity market risk and you should do it only if you intend to hold it for 3-5 years.

Another way of exchanging cash is without opening an account is through a currency exchange broker (search “toronto currency exchange” for relevant companies). First you send an email asking for a quote for the amount you wanted, then you send the CAD to them via cheque, and they would convert to EUR and deposit it to your EUR account at Scotiabank (retail banking). This method costs around 0.7% compared to 2.5% charged by Scotiabank. An example of these brokers is Interchange Currency Exchange in Toronto.

If you are hedging more than 125000 EUR, the proper method is to open an account that supports trading Currency Futures on Globex (US CME group). You can long Euro/Canadian Dollar Futures on margin.

The last method is to open an account at Interactive Brokers, put CAD in it, then borrow more CAD to buy EUR. This method costs a few dollars upon trading and the spread is negligible. You need to pay 2.25% per year margin interest through.

  • Great answer, I need to do some reading on your suggestions before I can comment intelligently. Thanks! – mgjk Apr 9 '15 at 14:04
  • At IB you could just exchange the money for EUR, no margin interest. Note that with a balance less than $100k, you'll pay account fees. – brian Oct 4 '15 at 14:40
  • @brian Please cite the source for 100K balance. IB account fees are for under 3K (if under age 26) and 10K (otherwise). – base64 Oct 4 '15 at 15:20
  • Monthly activity fees Note the 100k is USD so even more in CAD now. – brian Oct 4 '15 at 15:26
  • @brian You are right. – base64 Oct 4 '15 at 15:28

protected by Ganesh Sittampalam Feb 14 at 18:40

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