To clear up something that’s fuzzy to some people:
The currency you use to buy the shares has nothing to do with your currency exposure from owning them.
You could buy them with cowrie shells and sell them in return for peanuts, and it wouldn’t change anything.
For example, Berkshire B shares are listed in Euros in Germany. If I buy them there, my return is neither higher nor lower.
This is one of the (not numerous) ways in which CRA is rational; no matter which currency you
use for the purchase OR the sale, the taxable profit is the same to them.
The real currency exposure of a stock position is the currency exposure of that business.
If a business has almost all its revenue in US dollars but most of its expenses in non-US dollars, it will do well if the US dollar is strong.
That will lead to a share price that is high measured in purchasing power of a share, not necessarily in dollars or yen which change size all the time.
A dollar store might be an example.
And the reverse for a business with mostly US expenses but mostly non-USD revenue, like Coca Cola: it will prosper with a weak US dollar.
Your other main currency exposure, and the one you have most control of, is your personal holdings of cash, positive (cash) or negative (debt).
The currency in which a bond is denominated makes it have full currency exposure like a cash holding.
So, to your question, for a stock that can be purchased in more than one currency, pick the one that is most convenient.
If it skips a forex fee, use the currency you have on hand.
The main currency implication of your decision is the change in the currency exposure from the change in your cash balance you have left afterwards.
If it can’t be purchased with the currency you have on hand, just do the currency exchange.
If currency exchange fees are a concern, I strongly recommend having an account at Interactive Brokers.
They plug you directly into the international forex markets. It is essentially free, with essentially no spread.
You can deposit money to your account in one currency and withdraw it in another currency to another account,
provided you have bank accounts (anywhere) in the two currencies which are both in the same name as your IB account.
I basically haven’t paid a forex spread in years except on some credit card transactions while travelling.
I plan to avoid that soon by getting a Wise card which maintains balances in each currency.
If that is too inconvenient, then I can offer another tip: banks dicker.
Don’t just do the forex, talk to your bank and ask for a fantastic rate on the forex.
My wee company in Canada did most of its work in US dollars, and received US cheques as payment.
We used to deposit these in the bank, which did the conversion for us, and took advantage of us.
One day we mentioned we were taking it to a specialist currency house, and they commented “what rate are they offering?”
The scales fell from our eyes. Banks negotiate??
Within a couple of months, each time we got a cheque our bookkeeping person (coincidentally my spouse, press ganged into service)
would get four or five banks and currency houses on the line simultaneously and auction it.
Pretty soon she knew to ask how many bips off their settle rate they were going to offer.
Jim