Hellome,
Everbank and Etrade
https://us.etrade.com/e/t/welcome/globaltrading?SC=NPNM358 offer avenues of investing in foreign currencies. One has to be wary of costs as a percentage of overall trade.
[quote]Desi, RRK and others
Can you please throw some light and give your opinion if fixed deposits in AUD's is logical at this point of time.[/quote]
You are asking about fixed deposit - this means you are looking for safety of principal. However you are considering a currency other than USD (assuming you are in US) and this means you are chasing higher returns. Higher returns do not come free, there is a cost associated with it and the cost is risk. The risk is of foreign currency translation.
If you can make 4% in US and 7% on your money in AUD say for one year. Then you are making 3% more per year and that would be 6% in two years. If your costs of currency translation plus USD appreciation against AUD exceeds 6% in two years, you would be better off in US. On the other hand if AUD appreciates or stays same, you will feel happy with increased returns. Elementary, you already know that. What you want is me to speculate whether AUD will appreciate against USD in two years - that, my friend is the gist of your question when you ask if it is logical.
I do not know what the AUD will do in two years against USD. Even the most experienced currency traders cannot tell you that. There are experts who claim that USD will continue to depreciate and yet there are others who are saying that since USD has depreciated 20% or so last year that we are close to a bottom and USD will not deprciate to like a third world currency and will reverse. So you see, opinions about and which one do I believe?
Besides, if it is fixed deposit you are chasing then it seems safety is important to you, but then you speculate and take risk with a foreign currency CD.
The best way to invest is per your AAP and have a good diversification across the world. If you are trying to diversify your fixed income across the world also, then you can look at short term international bonds, but they also come with the risk. I do not know your goals, other investments and if after 2 years you absolutely need this money for a specific goal.
Just as an FYI, I personally am invested in some international bond funds.
Some alternative options if you are interested in keeping your money in AUD are FXA (currency shares, but they will not give you fixed deposit rates), international bonds, Everbank, Etrade, Australian stocks, and Australian currency trades as Hakunamatata pointed out and currency futures.
Whether AUD will appreciate, I don't know. Sorry for the long winded answer when a simple sentence (I don't know) would have sufficed.
You really need to have a clear understanding of the end goal for that money and based on that the risk you are willing to tolerate and understand how you are going to mitigate higher risks of a single currency.