The euro is weakening against the U.S. dollar, with the greenback at an eight-month high against the common currency. As traders get more bearish on the euro, investors can consider inverse options to hedge EUR/USD fluctuations.

The CurrencyShares Euro Currency Trust (NYSEArca: FXE) weakened 0.4% Tuesday. FXE has declined 1.9% year-to-date.

Inverse options are strengthening. The ProShares Short Euro (NYSEArca: EUFX), which tracks the inverse, or -100%, daily performance of the U.S. dollar price of the euro, gained 0.6% Tuesday. Double inverse, or -200%, options include the ProShares UltraShort Euro (NYSEArca: EUO) and Market Vectors Double Short Euro ETN (NYSEArca: DRR), and they are up 0.8% and 0.7% Tuesday, respectively. [Bearish ETFs to Play a Weakening Euro]

Meanwhile, the PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) was up 0.3% Tuesday.

The U.S. dollar advanced 0.4% to 1.347 per euro Tuesday after touching $1.3459, its strongest since Nov. 21.

The euro is beginning to weaken as funding measures and monetary policies between the U.S. and Eurozone diverge, with the Federal Reserve looking to tightening its monetary policy while the European Central Bank adds unprecedented stimulus measures, reports John Detrixhe for Bloomberg.

“Where we’ve had the unique reaction is euro-dollar,” Greg Anderson, head of global foreign-exchange strategy at Bank of Montreal, said in the article. “That’s not a data response — that is a market that’s looking to sell euro.”

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