Chinese Cash

The surprise Chinese central bank interest rate cut overnight caught most everyone off guard, and we find the continued soar of the U.S. Dollar on this, most compelling. UUP (PowerShares DB U.S. Dollar Index Bullish, Expense Ratio 0.80%) is challenging another multi-year high this morning on a notable gap up (+0.56%), and interestingly Oil is spiking today as well and we do not often see Dollar/Oil rallies like this in tandem.

Year to date the fund has had a decent run in terms of attracting assets, with about $198 million flowing in in 2014, bringing UUP’s asset base to about $940 million. Notably the Chinese Yuan which of course is pegged to the U.S. Dollar is also in the headlines, and this has us watching CYB (WisdomTree Chinese Yuan Fund, Expense Ratio 0.45%) rather closely as well.

CYB has actually seen some trimming over the course of 2014 with $70 million flowing out of the fund, in spite of a nice move up throughout most of the year. Despite these outflows, CYB is still the eighth largest Currency based ETF in the U.S. landscape.

UUP is of course the largest Currency ETP, and by a wide margin over the next closest competitor (FXA – CurrencyShares Australian Dollar, Expense Ratio 0.40%) which only has about $272 million in AUM. CYB is not the only Chinese Yuan based ETP in the U.S. marketplace but it is the largest and most well-known at the moment.

Market Vectors listed CNY (Chinese Renminbi/USD ETN, Expense Ratio 0.55%) back in early 2008 but the fund has only managed to gather about $37 million since inception. FXCH (CurrencyShares Chinese Reniminbi, Expense Ratio 0.40%) was listed in late 2011 by Guggenheim to add to its suite of other “CurrencyShares” products, but this fund has been challenged to raise assets and visibility as well, as it only has about $8.1 million in AUM and trading volume of less than 2,000 shares daily.