Finally, a bit of good news for anyone who was bullish on the dollar and held the corresponding exchange traded fund (ETF): the British pound dropped below $2 for the first time in three months on Wednesday.

The dip came after the Bank of England unanimously decided to cut interest rates, says Peter Garnham of the Financial Times. The dollar, overall, has been showing a little strength: last week, it rose to its highest levels in more than a month against the euro and the yen.

More good news for the dollar came this week as the price gauge (excluding food and energy) rose 2% from July through September. The gauge is a key inflation indicator.

If you’re bullish on the dollar, there’s the PowerShares DB US Dollar Index Bullish (UUP). The ETF, introduced in March, is made up of long futures contracts, and is designed to replicate being long on the dollar against the euro, yen, British pound, Canadian dollar, Swedish krona and Swiss franc. Another option to capitalize on the strengthening dollar is by shorting Rydex’s CurrencyShares.

Below is a chart of the U.S. Dollar to the British Pound:

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

Tags: Currency ETFs, Europe, United Kingdom