For investors concerned about this risk, currency strategies that take long positions in the U.S. dollar may help offset some of the currency risk inherent in international equity positions. With cash offering very little income and the net carry sacrifice for dollar-biased positions relatively low, we feel that dollar-bullish strategies could offer investors appealing diversification benefits if risk spikes or the U.S. economy continues to strengthen.
Important Risks Related to this Article
Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations.