Financial Select Sector SPDR (NYSEArca: XLF) fell over 1% Tuesday with top-five holding Citigroup (NYSE: C) weighing on the ETF following a report the banking giant could be on the hook for as much as $7 billion of currency losses.

Charles Peabody, an analyst at Portales Partners, forecasts Citi could lose $5 billion to $7 billion if the U.S. dollar strengthens against some foreign currencies, Bloomberg reports.

Citi is the fourth-largest holding in XLF at 6.4% of the portfolio.

XLF fell harder than the S&P 500 on Tuesday although the financial sector has been a market leader in 2013. The ETF was up 22.3% year to date as of June 10, compared with a gain of 16.2% for the S&P 500, according to Morningstar. [Financial ETF Challenging for 2013 Sector Leadership]

Citigroup shares were off more than 3% on Tuesday.

Financial Select Sector SPDR

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.

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.