Are Bullish Dollar ETF’s Days Numbered?
By Tom Lydon on December 10, 2008 | More Posts By Tom Lydon | Author's Website
As the dollar has spent some of this year recouping against a basket of major currencies, people are becoming unsure as to the fate of the greenback. Can the rally be sustained in the dollar and its exchange traded funds (ETFs)? How high can it go?
In four months, the dollar has strengthened against the euro by 23%, 34% against the British pound, and even more against some other developing countrys’ currencies, reports Joanna Slater for The Wall Street Journal.
As it turns out, extreme financial distress has caused investors to seek refuge in world’s reserve currency and in U.S. Treasury bonds. Investors are wary that this comeback may be short-lived considering challenges in the U.S. economy, but it is likely to continue into the next year.
Investors are concerned over the possibility of future rampant inflation and a situation where foreign investors could scale back or completely stop buying U.S. assets, in which case the dollar would spiral downward along with rising interest rates.
One way to protect oneself from fluctuations in the dollar would be to own stocks or bonds denominated in other currencies. A potential investor may also consider bull or bear dollar ETFs, depending on your optimistic/pessimistic outlook, such as:
- PowerShares DB U.S. Dollar Index Bullish (UUP): currently up 10.5% year-to-date
- PowerShares DB U.S. Dollar Index Bearish (UDN): down 9% year-to-date
Why Agriculture And Food ETFs Make Sense In This Market
JP Morgan’s CEO In The Running To Succeed Tim Geithner As US Treasury Secretary?
US, UK, Japan, Italy: Which Of These Countries Will Default First?
EUR/JPY Falls Below 200 Day Moving Average Today But Rebounds
US Jobless Claims Falls Below 500,000 For First Time Since Nov 2008
European Markets Rise On U.S. Data, Strong Miners - European Commentary - 57 mins ago
Stocks Giving Back Some Ground But Remain Mostly Positive - U.S. Commentary - 2 hrs ago
*EIA - Natural Gas Inventories Up 2 BCF - 2 hrs ago
MBA: Re-Fi Activity Plunges Despite Low Rates - 2 hrs ago
MBA: Re-Fi Activity Plunges Despite Low Rates - 2 hrs ago


