Dollar Rallies, Foreign Currency ETFs Slip

Currency exchange traded funds (ETFs) can be used to take advantage of the position of the dollar and other currencies.  A U.S. Labor Department  report showed non-farm payrolls rose by 167,000 last month, causing the U.S. dollar to rally to six week highs against the euro and the British pound. Wanfeng Zhou of MarketWatch reports recent trading patterns should continue and the dollar will remain near its highs as job numbers continue to support the case for the Fed to remain on hold.

What does this mean for the foreign currency ETFs?  Most have declined by 1-2% within the last week alone. However the Euro is up about 8% in the past twelve months compared to the US dollar.

Currency ETFs include:

• CurrencyShares Euro Trust (FXE)
• CurrencyShares British Pound (FXB)
• CurrencyShares Canadian Dollar Trust (FXC)
• CurrencyShares Australian Dollar Trust (FXA)
• CurrencyShares Swiss Franc Trust (FXF)
• CurrencyShares Swedish Krona Trust (FXS)
• CurrencyShares Mexican Peso Trust (FXM)

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.