Am I exposed to currency risk when I invest in shares of a foreign company that are listed domestically?
"Yes, you're still exposed to currency risk when you purchase the stock on company B's exchange. I'm assuming you're buying the shares on B's stock exchange through an ADR, GDR, or similar instrument. The risk occurs as a result of the process through which the ADR is created. In its simplest form, the process works like this: I'll illustrate this with an example. I've separated the conversion rate into the exchange rate and a generic ""ADR conversion rate"" which includes all other factors the bank takes into account when deciding how many ADR shares to sell. The fact that the units line up is a nice check to make sure the calculation is logically correct. My example starts with these assumptions: I made up the generic ADR conversion rate; it will remain constant throughout this example. This is the simplified version of the calculation of the ADR share price from the European share price:  Let's assume that the euro appreciates against the US dollar, and is now worth 1.4 USD (this is a major appreciation, but it makes a good example):  The currency appreciation alone raised the share price of the ADR, even though the price of the share on the European exchange was unchanged. Now let's look at what happens if the euro appreciates further to 1.5 USD/EUR, but the company's share price on the European exchange falls:  Even though the euro appreciated, the decline in the share price on the European exchange offset the currency risk in this case, leaving the ADR's share price on the US exchange unchanged. Finally, what happens if the euro experiences a major depreciation and the company's share price decreases significantly in the European market? This is a realistic situation that has occurred several times during the European sovereign debt crisis.   Assuming this occurred immediately after the first example, European shareholders in the company experienced a (43.50 - 50) / 50 = -13% return, but American holders of the ADR experienced a (15.95 - 21.5093) / 21.5093 = -25.9% return. The currency shock was the primary cause of this magnified loss.  Another point to keep in mind is that the foreign company itself may be exposed to currency risk if it conducts a lot of business in market with different currencies. Ideally the company has hedged against this, but if you invest in a foreign company through an ADR (or a GDR or another similar instrument), you may take on whatever risk the company hasn't hedged in addition to the currency risk that's present in the ADR/GDR conversion process. Here are a few articles that discuss currency risk specifically in the context of ADR's: (1), (2). Nestle, a Swiss company that is traded on US exchanges through an ADR, even addresses this issue in their FAQ for investors. There are other risks associated with instruments like ADR's and cross-listed companies, but normally arbitrageurs will remove these discontinuities quickly. Especially for cross-listed companies, this should keep the prices of highly liquid securities relatively synchronized."
why should I have any bias in favour of my local economy? The main reason is because your expenses are in the local currency.   If you are planning on spending most of your money on foreign travel, that's one thing.  But for most of us, the bulk of our expenses are incurred locally.  So it makes sense for us to invest in things where the investment return is local.   You might argue that you can always exchange foreign results into local currency, and that's true.  But then you have two risks.  One risk you'll have anywhere:  your investments may go down.  The other risk with a foreign investment is that the currency may lose value relative to your currency.  If that happens, even a good performing investment can go down in terms of what it can return to you.  That fund denominated in your currency is really doing these conversions behind the scenes.   Unless the bulk of your purchases are from imports and have prices that fluctuate with your currency, you will probably be better off in local investments.  As a rough rule of thumb, your country's import percentage is a good estimate of how much you should invest globally.  That looks to be about 20% for Australia.  So consider something like 50% local stocks, 20% local bonds, 15% foreign stocks, 5% foreign bonds, and 10% local cash.  That will insulate you a bit from a weak local currency while not leaving you out to dry with a strong local currency.   It's possible that your particular expenses might be more (or less) vulnerable to foreign price fluctuations than the typical.  But hopefully this gives you a starting point until you can come up with a way of estimating your personal vulnerability. If you are a US citizen, you need to very carefully research the US tax implications of investing in foreign stocks before you do so. The US tax rules have been set up in general to make this very unattractive. "Tricky question, basically, you just want to first spread risk around, and then seek abnormal returns after you understand what portions of your portfolio are influenced by (and understand your own investment goals) For a relevant timely example: the German stock exchange and it's equity prices are reaching all time highs, while the Greek asset prices are reaching all time lows. If you just invested in ""Europe"" your portfolio will experience only the mean, while suffering from exchange rate changes. You will likely lose because you arbitrarily invested internationally, for the sake of being international, instead of targeting a key country or sector. Just boils down to more research for you, if you want to be a passive investor you will get passive investor returns. I'm not personally familiar with funds that are good at taking care of this part for you, in the international markets." it looks like using an ADR is the way to go here.  michelin has an ADR listed OTC as MGDDY. since it is an ADR it is technically a US company that just happens to be a shell company holding only shares of michelin. as such, there should not be any odd tax or currency implications. while it is an OTC stock, it should settle in the US just like any other US OTC. obviously, you are exposing yourself to exchange rate fluctuations, but since michelin derives much of it's income from the US, it should perform similarly to other multinational companies. notes on brokers: most US brokers should be able to sell you OTC stocks using their regular rates (e.g. etrade, tradeking). however, it looks like robinhood.com does not offer this option (yet). in particular, i confirmed directly from tradeking that the 75$ foreign settlement fee does not apply to MGDDY because it is an ADR, and not a (non-ADR) foreign security. "Yes and no.  There are two primary ways to do this.  The first is known as ""cross listing"". Basically, this means that shares are listed in the home country are the primary shares, but are also traded on secondary markets using mechanisms like ADRs or Globally Registered Shares. Examples of this method include Vodafone and Research in Motion. The second is ""dual listing"". This is when two corporations that function as a single business are listed in multiple places. Examples of this include Royal Dutch Shell and Unilever. Usually companies choose this method for tax purposes when they merge or acquire an international company. Generally speaking, you can safely buy shares in whichever market makes sense to you." International equity are considered shares of companies, which are headquartered outside the United States, for instance Research in Motion (Canada), BMW (Germany), UBS (Switzerland). Some investors argue that adding international equities to a portfolio can reduce its risk due to regional diversification. There's a possibility to lose money in exchange rate shifts, but just as much chance to gain money (Efficient Market Hypothesis and all that). If you're worried about it, you should buy a stock in Canada and short sell the US version at the same time. Then journal the Canadian stock over to the US stock exchange and use it to settle your short sell. Or you can use derivatives to accomplish the same thing. Foreign stocks have two extra sources of risk attached to them; exchange rate and political.  Exchange rate risk is obvious; if I buy a stock in a foreign currency and there is a currency movement that makes that investment worth less I lose money no matter what the stock does. This can be offset using exchange rate swaps. (This is ceteris paribus, of course; changes in exchange rate can give a comparative advantage to international and exporting companies that will improve the fundamentals and so increase the price of the stock relative to a local firm. The economics of the firms in particular are not explored in this answer as it would get too complicated and long if I did.) Political risk relates not only to the problems surrounding international politics such as a country deciding that foreign nationals may no longer own shares in their national industries or deciding to seize foreign nationals' assets as happens in some areas. Your home country may also decide to apply sanctions to the country in which you are invested thus making it impossible to get your money back even though the foreign country will allow you to redeem them or sell. Diplomatic relations and trade agreements tend to be difficult. There are further problems in lack of understanding of foreign countries' laws, tax code, customs etc. relating to investments and the necessity to find legal representation in a country you may never have visited if there are issues. There is also a hidden risk in that, as an individual investor, you are not likely to be reading the local financial news for that country regularly enough to spot company specific issues arising. By the time these issues get into international media its far too late as all of the local investors have sold out of their positions already. The risks are probably no different if you have the time to monitor international relations and the foreign country's news, and have FX swaps in place to counteract FX risk as the funds and investment banks do but as an individual investor the time required is not feasible. Although not technically an answer to your question, I want to address why this is generally a bad idea.   People normally put money into a savings account so that they can have quick access to it if needed, and because it is safe.  You lose both of these advantages with a foreign account.  You are looking at extra time and fees to receive access to the money in those australian accounts.  And, more importantly, you are taking on substantial FX risk.  Since 2000 the AUD exchange rate has gone from a low of 0.4845 to a high of 1.0972.  Those swings are almost as large as the swings of the S&P.  But, you're only getting an average return of 3.5%, instead of the average return people expect with stocks of 10%. A better idea would be to talk to a financial adviser who can help you find an investment that meets your risk tolerance, but gives you a better return than your savings account. On a final thought, the exception to this would be if you plan on spending significant time in Australia.  Having money in a savings account there would actually allow you to mitigate some of your FX risk by allowing you to decide whether to convert USD when you are travelling, or using the money that you already have in your foreign account. Any large stockbroker will offer trading in US securities. As a foreign national you will be required to register with the US tax authorities (IRS) by completing and filing a W-8BEN form and pay US withholding taxes on any dividend income you receive.  US dividends are paid net of withholding taxes, so you do not need to file a US tax return.  Capital gains are not subject to US taxes.  Also, each year you are holding US securities, you will receive a form from the IRS which you are required to complete and return. You will also be required to complete and file forms for each of the exchanges you wish to received market price data from. Trading will be restricted to US trading hours, which I believe is 6 hours ahead of Denmark for the New York markets.  You will simply submit an order to the desired market using your broker's online trading software or your broker's telephone dealing service. You can expect to pay significantly higher commissions for trading US securities when compared to domestic securities. You will also face potentially large foreign exchange fees when exchaning your funds from EUR to USD. All in all, you will probably be better off using your local market to trade US index or sector ETFs. Adding international bonds to an individual investor's portfolio is a controversial subject.  On top of the standard risks of bonds you are adding country specific risk, currency risk and diversifying your individual company risk.  In theory many of these risks should be rewarded but the data are noisy at best and adding risk like developed currency risk may not be rewarded at all. Also, most of the risk and diversification mentioned above are already added by international stocks.  Depending on your home country adding international or emerging market stock etfs only add a few extra bps of fees while international bond etfs can add 30-100bps of fees over their domestic versions.  This is a fairly high bar for adding this type of diversification.  US bonds for foreign investors are a possible exception to the high fees though the government's bonds yield little. If your home currency (or currency union) does not have a deep bond market and/or bonds make up most of your portfolio it is probably worth diversifying a chunk of your bond exposure internationally.  Otherwise, you can get most of the diversification much more cheaply by just using international stocks. There are short-term and long term aspects. In the long term, if you live and work in Australia and plan to continue doing both indefinitely, you might as well move all your cash investments there.  There would be no point bearing the exchange rate risks.  It may be worth keeping the account open with just enough credit to stop it being shut down.  There is no point needing to (think about) filing foreign tax returns just because you have an account earning a small amount of interest. In the short term, I think the more important question is practicality rather than exchange rate risk.  You want to have enough cash in both countries that if you suddenly have to pay say an apartment deposit or a bill, you won't be caught short.  So I would leave at least a few thousands dollars in a US bank account until at least a couple of months after the move, when I was sure everything was settled. Good luck. Academic research into ADRs seems to suggest that pairs-trading ADRs and their underlying shares reveals that there certainly are arbitrage opportunities, but that in most (but not all cases) such opportunities are quickly taken care of by the market. (See this article for the mexican case, the introduction has a list of other articles you could read on the subject). In some cases parity doesn't seem to be reached, which may have to do with transaction costs, the risk of transacting in a foreign market, as well as administrative & legal concerns that can affect the direct holder of a foreign share but don't impact the ADR holder (since those risks and costs are borne by the institution, which presumably has a better idea of how to manage such risks and costs). It's also worth pointing out that there are almost always arbitrage opportunities that get snapped up quickly: the law of one price doesn't apply for very short time-frames, just that if you're not an expert in that particular domain of the market, it might as well be a law since you won't see the arbitrage opportunities fast enough. That is to say, there are always opportunities for arbitrage with ADRs but chances are YOU won't be able to take advantage of it (In the Mexican case, the price divergence seems to have an average half-life of ~3 days). Some price divergence might be expected: ADR holders shouldn't be expected to know as much about the foreign market as the typical foreign share holder, and that uncertainty may also cause some divergence. There does seem to be some opportunity for arbitrage doing what you suggest in markets where it is not legally possible to short shares, but that likely is the value added from being able to short a share that belongs to a market where you can't do that. There contracts called an FX Forwards where you can get a feel for what the market thinks an exchange rate will be in the future.  Now exchange rates are notoriously uncertain, but it is worth noting that at current prices market believes your Krona will be worth only 0.0003 Euro less three years from now than it is worth now. So, if you are considering taking money out of your investments and converting it to Euro and missing out on three years of dividends and hopefully capital gains its certainly possible this may work out for you but this is unlikely.  If you are at all uncertain that you will actually move this is an even worse idea as paying to convert money twice would be an additional expense on top of the missed returns. There are FX financial products (futures and forwards) where you can get exposure to FX without having to put the full amount down.  This could help hedge your house value but this can be extremely expensive over time for individual investors and would almost certainly not work in your favor. Something that could help reduce your risk a bit would be to invest more heavily in European even Irish (and British?) stocks which will move along with the currency and economy.  You can lose some diversification doing this, but it can help a little. I just decided to start using GnuCash today, and I was also stuck in this position for around an hour before I figured out what to do exactly. The answer by @jldugger pointed me partially on the right track, so this answer is intended to help people waste less time in the future.  (Note: All numbers have been redacted for privacy issues, but I hope the images are sufficient to allow you to understand what is going on. ) Upon successfully importing your transactions, you should be able to see your transactions in the Checking Account and Savings Account (plus additional accounts you have imported). The Imbalance account (GBP in my case) will be negative of whatever you have imported. This is due to the double-entry accounting system that GnuCash uses.    Now, you will have to open your Savings Account.   Note that except for a few transactions, most of them are going to Imbalance. These are marked out with the red rectangles.   What you have to do, now, is to click on them individually and sort them into the correct account. Unfortunately (I do not understand why they did this), you cannot move multiple transactions at once. See also this thread. Fortunately, you only have to do this once.  This is what your account should look like after it is complete.   After this is done, you should not have to move any more accounts, since you can directly enter the transactions in the Transfer box. At this point, your Accounts tab should look like this:  Question solved!