October 31, 2008 at 12:00 pm by Tom Lydon
The dollar and yen exchange traded funds (ETFs) are gearing up to cap off a banner month, with their strongest one-month gain against the euro ever.
Global recession fears are prompting investors to sell off their higher-yielding currencies, benefiting the dollar and yen, report Lukanyo Mnyanda and Stanley White.
In October alone, CurrencyShares Japanese Yen (FXY) is up 7.8% and PowerShares DB U.S. Dollar Index Bullish (UUP) is up 6.8%. Year-to-date, they’re up 12.9% and 10.2%, respectively.
A strong yen, however, isn’t always a good thing for everyone. Since Japan is such a big exporter of goods, a robust yen hurts profits, which will then hurt the country’s stock market. That, in turn, could have a ripple effect on exchanges in the United States and Europe.
Read the disclosure, as Tom Lydon is a board member of Rydex Funds.
Tags: Asia, Currency ETFs, FXY, Japan, Japanese Yen, U.S. Dollar, UUP
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