The United Kingdom exchange traded fund (ETF), iShares MSCI United Kingdom Index (EWU) could see some positive effects from the rise of the British Pound. This week, the Pound broke through the $2 mark for the first time in fifteen years, writes Carl Delfeld for ETFXRAY.com.

Inflation seemed to be the culprit in moving the pound past $2.  With a rising CPI rate in the U.K., there has been speculation of a hike in interest rates.  This new level could help keep a lid on inflation, but it can also make exports more expensive for international markets.  The markets should bring things in balance.

Meanwhile, EWU is up 7% year-to-date, with top holdings in BP at 6.08% and HSBC Holdings at 6.66%. Also available for ETF investors is the CurrencyShares British Pound (FXB).

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

Tags: Currency ETFs, Europe, EWU, United Kingdom