Other data suggest investors are apprehensive about betting on sustained dollar weakness. For the week ended March 24, the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ) and the Deutsche X-trackers MSCI EAFE Hedged Equity ETF (NYSEArca: DBEF) were two of the top asset-gathering ETFs. That is an extension of theme that has seen HEDJ and DBEF claim the top two spots for 2015 ETF inflows.
Remembering securities, including currencies, rarely move up in unabated, straight-line fashion, Azous’ “buy the dollar dip” thesis appears likely to be validated. Being short the euro and krona seems advisable, particularly after Sweden’s recent move to take its repo rate further into negative territory. The Reserve Bank of Australia appears poised to lower rates again this year while S&P Capital said that hedging the British pound “appears wholly justifiable” and the research firm sees little reason to be long the yen against major global currencies. [ETFs for Global Currency Wars]
PowerShares DB US Dollar Index Bullish Fund
Tom Lydon’s clients own shares of GLD and HEDJ.