One of last year’s strong currencies seems to have taken a bit of a stumble along with its exchange traded fund (ETF) and for once, it’s not the U.S. dollar.
The British pound was a powerhouse at one point, trading nearly double the rate of our own dollar. Today, reports Gary Gordon of ETF Expert, the currency is trading near 52-week lows and is worth only slightly more than its value at the start of 2007.
What’s going on? The British economy is in the doldrums – the housing market is in trouble, consumer spending is down and the European Union hasn’t yet signaled any need to lower rates, while the Bank of England may follow the United States’ lead.
The troubles are spreading beyond the CurrencyShares British Pound Sterling Trust (FXB), too, which is below its 200-day moving average. The iShares MSCI United Kingdom Fund (EWU) is also close to a bear trend.
CurrencyShares Euro Trust (FXE), on the other hand, has been on an upward trend and is well above its 200-day moving average.
Read the disclosure, as Tom Lydon is a board member of Rydex Investments.
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.