ETF Trends
ETF Trends

The all-mighty dollar is still the popular kid on the currency block despite sweeping bailouts, and people are still putting their investments into the dollar and related exchange traded funds (ETFs).

Fears Didn’t Come to Fruition. As the United States goes on printing more money or borrowing like there’s no tomorrow to stabilize our economy, it is traditionally thought that rampant inflation or a drop in value of the dollar would occur, writes Ashley Milne-Tyte for Marketplace. But our steadfast greenback has held its ground.

Why?

  • Hoarding Boosts Value. It is found that there is not an excessive supply of the dollar, but rather that the opposite has occurred  because banks that are just hoarding cash and not lending it out, and because foreigners use dollars to buy Treasury bills.
  • Investors Bet on Survival. Uncertainty has shaken up currency investors by allowing them to revert back to their old habit of stashing away investments in the relative safety of the dollar. The investors are betting on the U.S.’s ability to survive this economic upheaval and thrive afterward.

Depending on your future outlook, these ETFs may be of interest when investing in the dollar:

  • PowerShares DB U.S. Dollar Index Bullish (UUP): down 1.2% in the last week; up 4.2% in the last month

ETF UUP

  • PowerShares DB U.S. Dollar Index Bearish (UDN): up 1.2% in the last week; down 4.1% in the last month

ETF UDN performance

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.