Aroop Chatterjee, a strategist at Barclays, argues that the euro has more room to depreciate, with the central bank more apt to further ease its monetary policy.
“We now expect a large, multiyear downtrend in the euro,” Chatterjee said in the article. “Much of this depreciation is likely to come in the next six months.”
Traders who want to position for additional declines in the euro can consider inverse ETF options, such as the ProShares Short Euro (NYSEArca: EUFX), which tracks the inverse, or -100%, daily performance of the U.S. dollar price of the euro, along with the double inverse or -200% option, the ProShares UltraShort Euro (NYSEArca: EUO). Over the past three months, EUFX is up 7.5% and EUO is up 15.2%.
Furthermore, some traders believe the BOJ will likely implement additional stimulus measures after Japan’s economy shrunk over the second quarter at its fastest pace since 2009, fueling another round of yen selling. [Japanese Yen ETFs Face Major Headwinds]
For those who want to hedge against further weakness in the yen, the ProShares UltraShort Yen (NYSEArca: YCS) tries to reflect the daily -2x or -200% daily return of the U.S. dollar price of the yen. YCS has increased 16.0% over the past three months.
For more information on the greenback, visit our U.S. dollar category.
Max Chen contributed to this article.