Although the euro has felt its share of pain for much of this year, that hasn’t swayed Estonia. The country will switch over from the kroon at midnight, and euro exchange traded funds (ETFs) are bouncing today on this and other bullish signals for the currency.
The dollar declined against the euro, making this its largest yearly gain since 2005, as speculation that global economic growth will pick up next year. Investors are selling the U.S. currency in response. Allison Bennett for Bloomberg reports that the greenback weakened against 14 of its 16 major counterparts, touching a two-week low today against the euro. [The Troubles That Will Afflict Europe ETFs Into 2011.]
PowerShares DB U.S. Dollar Bearish (NYSEArca: UDN) is up nearly 1%, while CurrencyShares Euro Trust (NYSEArca: FXE) and WisdomTree Dreyfus Euro (NYSEArca: EU) are up 0.5% and 0.9% today, respectively.
Outpacing all of those is CurrencyShares British Pound Sterling (NYSEArca: FXB), which is up more than 1% today, signaling an appetite for risk. It could sure use the boost, because it’s down nearly 5% year-to-date. Analysts believe that 2011 could be the pound’s year, so watch this one.
BNO News for Wireupdate reports that banks have supplied Euro cash to shops and businesses under contract so they can handle payments and return change in Euro starting on Saturday. With the addition of Estonia to the euro currency, more than 330 million people will share the same currency.
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.
Tisha Guerrero contributed to this article.
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.