Many people believe this trend will continue because developing economies are growing, their interest rates are higher and they’re commodity-export driven. Funds like WisdomTree Dreyfus Emerging Currency (NYSEArca: CEW) and WisdomTree Dreyfus Commodity Currency Fund (NYSEArca: CCX) are two ways for investors to get exposure to this trend.
“These are all investment themes that give folks a way to diversify and potentially hedge, should the dollar continue to lose value.”
Of course, the dollar has had periods of strengths, which was last seen from November 2009 until June 2010. Despite the periodic flight to quality, Siracusano says that the long-term direction of the dollar has been down, relative to the rest of the world.
For a fundamental reverse in the weaker dollar, higher interest rates, a faster-growing economy and a willingness to deal with deficits would need to be seen. “Right now, those three things are not on the table,” Siracusano says.
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.
Tisha Guerrero contributed to this article.