The United Kingdom exchange traded fund (ETF), iShares MSCI United Kingdom Index (EWU) could see some positive effects from the rise of the British Pound. This week, the Pound broke through the $2 mark for the first time in fifteen years, writes Carl Delfeld for ETFXRAY.com.
Inflation seemed to be the culprit in moving the pound past $2. With a rising CPI rate in the U.K., there has been speculation of a hike in interest rates. This new level could help keep a lid on inflation, but it can also make exports more expensive for international markets. The markets should bring things in balance.
Meanwhile, EWU is up 7% year-to-date, with top holdings in BP at 6.08% and HSBC Holdings at 6.66%. Also available for ETF investors is the CurrencyShares British Pound (FXB).
Read the disclosure, as Tom Lydon is a board member of Rydex Funds
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.