“The market has romanticized about the possibility that the BOE will become the first [major country]to hike rates,” Brian Daingerfield, a currency strategist at RBS, said in the article. “The U.K. story right now is near-term positive, and significantly medium-term negative, for sterling.”
The CurrencyShares British Pound Sterling Trust is based on a deposit account denominated in British pound sterling.
The stronger British currency can also help bolster returns for United Kingdom ETFs that do not hedge against the pound sterling. For instance, the iShares MSCI United Kingdom ETF’s (NYSEArca: EWU) tracks U.K. companies and does not hedge its currency risk, so a rising U.K. market coupled with a stronger pound sterling would translate to greater U.S.-dollar returns.
CurrencyShares British Pound Sterling Trust
For more information the U.K. currency, visit our British pound category.
Max Chen contributed to this article.