“As the dollar bull cycle enters its fourth year, we should also note that past dollar cycles have lasted seven to ten years. While the trade weighted dollar (value of the dollar relative to a basket of major foreign currencies) has appreciated 14.2% over the past four years, it remains far below its historical highs. In fact, the U.S. dollar depreciated more than 32.3% in the preceding period of 2002 to 2010, leaving much room for recovery,” adds Kittsley.
DBAP includes ample emerging markets exposure, but a significant portion of that exposure is allocated to indirect strong dollar/direct weak oil price countries, including a combined 25.4% weight to China and India.
Nearly all of DBAP’s emerging markets weight, over 58% of the ETF’s weight, are net oil importers. Two-thirds of India’s trade deficit is attributable to oil imports and lower oil prices have been a key driver of ebbing inflation in Asia’s third-largest economy. [Return to Emerging Markets ETFs]
Deutsche X-Trackers MSCI Asia Pacific ex Japan Hedged Equity ETF
