The Iraqi Dinar: An Attractive High-Risk Investment For FOREX Traders
The Iraqi Dina has quickly become one of the most hotly debated speculative currencies on the market. In fact, many experts are claiming that it is one of the smartest investments for Foreign Exchange Traders today. The current instability in the middle-east can translate into wildly fluctuating economic conditions. This has created a prime opportunity for adventurous traders.
Why invest in Iraqi dinar Forex?
Despite the risk, a few investors are still willing to bet on a politically stable future Iraq. They are also finding a reason to invest in a potentially lucrative oil-based economy. This is because Iraq’s oil reserves are the second largest in the world. Which of course, makes a tempting case for prospective investors. Who are counting on Iraq someday increasing it’s number of daily oil barrel exports. While there are only a few Forex traders investing in the Dinar today — we can expect more to trickle in – especially as the regions stabilizes. This could mean huge returns for the risk tolerant investor.
Recently, only four currency types have reliably kept pace with Crude Oil futures. This has made them an attractive trading opportunity for those looking for to profit from oil price fluctuations. If an investor is looking for this type of commodity, dipping into the Iraqi Dinar may be a good move. While risky (and highly so at that) the potential profits could be worth the gamble.
This type of investor is betting on the Dinar worth having a high correlation to Crude Oil prices. Profiting from such a risky proposition requires that an trader pay close attention economic news announcements. In such an unstable region — not doing so can result in catastrophic losses. Yet, many savvy traders have reported making amazing profits with the unreliable Dinar.
The Iraqi Dinar found its way into circulation in 1931. It was originally backed by the British pound but more has more recently been aligned with the US dollar. In an effort to help stabilize the economy, the Central Bank of Iraq has begun to issue new currency. This has has led many global speculators to see an opportunity for quick wealth. However, the regions political troubles and the fall of Saddam Hussein has introduced some instability to the Iraqi economy. The countries provisional government has re-issued the Iraqi Dinar. The new Dinar now utilizes modern anti-forgery technology.
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This updated currency has been revalued as a result. The value has fluctuated from as low to 4000 Dinar per US dollar to as high as 980 Dinar per USD. Such wild variation in value is what many FOREX traders are hoping to cash in on. This has also opened the door for many internet con-artists. Many of these fly-by-night trading sites offer higher than normal exchange rates. It’s extremely wise to avoid these at all costs. Yet some investors are banking on the Dinar’s return rates to sky-rocket one the market for Iraqi currency opens up. Which is what happened with the Chinese Yuan earlier this decade.
Are there opportunities to invest in the Iraqi dinar Forex?
Many are wondering if the banking on the value of the Iraqi Dinar is really as risky as it sounds. Some investors are looking to past economic history in order to predict what may happen with Iraqi currency value. For example, the Kuwait Dinar’s value steeply declined to approximately 10 US cents, after the Iraqi invasion. However, post invasion the Kuwaiti Dinar has gradually switched to a higher valuation. This has translated into profit for those brave Forex traders with the foresight to invest in the Kuwait Dinar. Many of those who invested during the Gulf War yielded a 3,240% rate of return of 4,000!
This has led to similar expectations of a rebounding Iraqi economy. While it may seem speculative there are many economic factors that point to a possibly huge economic recovery in the region. For example, the country is rich in crude oil exports. This rebound is likely to occur under the careful guidance of the United States. As the U.S. is an oil hungry nation — Iraq is expected to huge economic recovery. A recovery that could be huge enough to catapult the region into a global economic force to be reckoned with. This economic improvement is expected to boost the value of the underlying currency. This in turn, could generate instant profits for those who speculated in the value of the Dinar.
Not only that, but with recent developments in the middle-east, economic recovery may be longer away than first that. None of this has stopped speculators from making initial investments into the Dinar. The truth being that regions potential vast oil wealth — may turn into huge economic boons. In fact, many FOREX traders believe that it’s not a matter of “if” the regions economy will rebound — but when.