A weakening dollar has lifted foreign currency exchange traded funds and also international equity ETFs that don’t hedge their currency exposure.

The largest currency ETF tracks the U.S. dollar against a basket of currencies. The $1.4 billion PowerShares DB US Dollar Index Bullish Fund (NYSEArca: UUP) is down 3% year to date. The ETF follows the greenback’s movements versus the euro, yen, pound, Canadian dollar, krona and franc.

There are also currency ETFs and ETNs that track specific pairs such as the dollar versus the yen. Investors may choose from funds indexed to emerging market currencies such as the Chinese yuan, Brazilian real and Indian rupee.

Here are some of the currency ETFs that have caught a tailwind from a slumping dollar in 2012:

  • WisdomTree Dreyfus Brazillian Real (NYSEArca: BZF)
  • CurrencyShares Euro Trust (NYSEArca: FXE)
  • CurrencyShares Australian Dollar Trust (NYSEArca: FXA)
  • WisdomTree Dreyfus Emerging Currency Fund (NYSEArca: CEW)
  • CurrencyShares Canadian Dollar Trust (NYSEArca: FXC)
  • WisdomTree Dreyfus Chinese Yuan Fund (NYSEArca: CYB)
  • CurrencyShares Swiss Franc Trust (NYSEArca: FXF)
  • CurrencyShares Mexican Peso Trust (NYSEArca: FXM)
  • WisdomTree Dreyfus Indian Rupee Fund (NYSEArca: ICN)

WisdomTree Dreyfus Emerging Currency Fund

The opinions and forecasts expressed herein are solely those of John Spence, 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.

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