Using the Rydex Euro Currency Trust (FXE) exchange traded fund can help with concern over a slowing economy and declining dollar.
Along with the fear of a slowing economy, investors are concerned a weakening market has encouraged the Fed to pause its policy of steadily increasing interest rates thus putting further downward pressure on the greenback.
Speculating that the U.S. dollar is headed lower, China is slowly but surely trading in their U.S. dollars for Euros and yen. China’s National Bureau of Statistics said the country should begin diversifying its foreign-exchange reserves in order to hedge itself against a falling U.S. dollar.
Investors can hedge their U.S. dollar by going long the FXE exchange traded fund. FXE represents a cost-effective investment relative to traditional means of investing in the foreign exchange market.
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Yaser Anwar is a guest author at ETFtrends & the editor of Investment Ideas by Yaser Anwar blog. The author of this article is not a registered financial advisor & does not give investment advice. This article does not comprise any solicitation to buy or sell securities, ETFs or other investment vehicles.
Read the disclosure, as Tom Lydon is a Board Member of Rydex Funds.