Brehon also argued that currency traders could see further weakness in the euro currency as growth risks linger, which could push the European Central Bank to increase easing.
The Eurozone experienced its largest monthly drop in inflation over January, with consumer prices dipping by 1.1% month-over-month, Reuters reports. Annual inflation rate was at 0.8% for a second month in a row, a level well below the ECB’s target of 2%. With inflation still low, the ECB has more room to maintain loose monetary policies.
To hedge against a weakening euro currency, ETF investors can take a look at the leveraged Market Vectors Double Short Euro ETN (NYSEArca: DRR) or a simple inverse euro ETF, ProShares Short Euro ETF (NYSEArca: EUFX). [Central Banks Could Affect Overvalued Euro]
For more information on world currencies, visit our currency ETFs category.