October 05, 2007 at 3:00 pm by Tom Lydon
As the dollar begins to rebound, we had a reader ask how exchange traded fund (ETF) investors can benefit. A couple of ways are available to take advantage of a climbing dollar:
- Buy long on the dollar. One way to do this is through the PowerShares U.S. Dollar Index Bullish Fund (UUP). Currently, it’s down 1.8% for the last three months, having launched in February. Conversely, there’s also the PowerShares U.S. Dollar Index Bearish Fund (UDN).
- Buy short on foreign currencies. One way to do this is through currency ETFs such as CurrencyShares Euro Trust (FXE) or the CurrencyShares British Pound Sterling Trust (FXB). Year-to-date, FXE is up 10.1% and FXB is up 8.4%.
Read the disclosure, as Tom Lydon is a board member of Rydex Investments.
Tags: Currency ETFs
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