Commodity Currency ETFs on the Move

September 10th at 12:00pm by Tom Lydon

A wave of positive Chinese economic reports sent commodity-backed currency exchange traded funds (ETFs) moving higher today.

News of China’s improving trade surplus and an increase in the country’s imports came on the heels of improving wholesale inventory numbers here and lower unemployment in Australia. All of it converged to push currencies tied to global growth higher against the dollar.

China’s recent trade surplus is showing a stronger-than-expected imports category, which shows that China’s demand is strong despite efforts to constrain growth. China’s yuan jumped to a one-month high against the U.S. dollar intraday after the People’s Bank of China set the dollar-yuan central parity rate at a record low. [Global Currency ETFs.]

Analysts think that Beijing is reacting to both international pressure over exchange rates and inflationary hazards at home.

  • Market Vectors Chinese Renminbi (NYSEArca: CNY)
  • WisdomTree Dreyfus Chinese Yuan (NYSEArca: CYB)
  • CurrencyShares Australian Dollar (NYSEArca: FXA)

The euro could be staying put for now, though. Bradley Davis for The Wall Street Journal reports that any lingering worries of the eurozone’s issues of sovereign debt and memories of recently disappointing U.S. data are likely to keep the lid on any gains in the euro. [Currency ETF 101.]

  • PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP)
  • PowerShares DB U.S. Dollar Index Bearish Fund (NYSEArca: UDN)

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.