Correct conversion of USD cash AC to default currency (GBP)

[tjhughes72]

Dear Mark,

I am a UK based investor and my default currecny is GBP. I am trying to set up a USD cash account as I have some USD shares. I have created a sub-portfolio with a USD cash account, and also another sub-portfolio to store the exchange rates (a "USD->GBP" investment which tracks USDGBP=X).

I am having problems showing the correct value of my USD cash account. I have set up the cash account with USD as the deafult currency and created a transfer in of $50,000 dated 31 March. I have also registered an exchange rate of USDGBP=X of 0.698 (i.e. US$1 buys £0.698).

The USD in native currency is showing up correctly as $50K. However when I view it with exchange rate adjusted it shows up as £71,649. So $50K is getting multiplied by 1.433 which is actually 1/0.698. How come?

For the life of me of have been trying to swap round various currencies, exchnage rates etc. to try and get it to show correctly but I can't. What am I doing wrong?

Kind regards,

Tom.

P.S. under "currency settings" I am tracking the "$" symbol against my "USD->GBP" investment which, as mentioned above, has a price of 0.698 for 31 March 2009.

[Mark]

Hi Tom,

Fund Manager is expecting the exchange rate the opposite way of this. Notice in the "Options / Currency Settings..." dialog the terminology is:

Currency <X> = 1 Default

So, you are setting how many currency X's equals 1 default currency. How many USD are equal to 1 GBP? It takes 1.433 USD to equal 1 GBP.

Instead of USDGBP=X, you want to use GBPUSD=X.

[tjhughes72]

Hi Mark,

Ah - thanks. I feel a bit of a bl**dy idiot..

Kind regards,

Tom

[Costas]

Hi Mark

I Have the same problem as Tom but my base currency is EUR and the foreign currency asset is in SGD (Singapore Dollar) and I am tracking the SGD exchange rate by means of setting a SGD Exchange rate investment ..Could you give please me the correct settings for conversion to EUR? Thx Costas

[Mark]

Hi Costas,

Since you have EUR set as your default, and want to convert SGD to EUR, you need to find how many SGD are equal to 1 EUR. To get this from Yahoo, use the symbol EURSGD=X, which is currently around 1.65. So, 1.65 SGD = 1 EUR.

[Costas]

Mark you are always on the ball as usual..

Thanks a lot again

Best

Costas

[NA JONES]

Hi Mark,
I Have the same problem as Tom and Costas but my base currency is GHS (Ghana Cedi)and the foreign currency asset is in USD and I am tracking the USD exchange rate by means of setting a USD Exchange rate investment. Im very sure i have the correct setting as GHSUSD=X but my cash account ignores the rate and records the same amount both ways. I maybe doing something wrong but i've watched the tutorial several times to guide me. Frustrating

Nana

[Mark]

Hi Nana,

So, the issue is your default cash account is not getting multiplied by the desired exchange rate? So, if you record a buy of some stock for 100 GHS the USD cash gets debited for 100 USD? If so, here are some things to check:

1) Check the currency property of your investments in question. Make sure they are assigned to the same currency position where you have the exchange rate investment assigned. For example, it is possible you could have multiple USD currencies defined. Notice, these are listed in "Investment Properties... / General / Currency" in the same order as defined in the Currency Settings dialog.

2) If you have "View / Exchange Rate Adjusted" turned on, you will see everything displayed in your default currency. So, if you are looking in your USD cash account, all the values would be shown adjusted to GHS. So, if you're seeing a sell of 100, that is 100 GHS if this option is on. Turn this option off to see everything in the native currency of each investment.

3) When you record the 100 GHS buy transaction are you specifying an exchange rate? If not, make sure the price recorded in your exchange rate investment for that transaction date is the correct exchange rate. Look in "Options / Currency Settings..." to verify the investment you have assigned to the currency of your cash. Then, look at the "Prices" of that exchange rate investment in the Data Register. Check the "Prices" data type while viewing that exchange rate investment. As long as the investment is assigned to the same currency that the exchange rate investment is assigned to, the closing price of the exchange rate investment will be used to convert between currencies to record the transaction.