“We think there is another 5 to 10 percent appreciation left in the dollar,” Worah said in the article. “Clearly if the dollar moves too fast, it impacts what the Federal Reserve does, but to put numbers on it – we see parity versus euro and 125 versus the yen. So another 5 or 7 percent from here wouldn’t change what the Fed is likely to do from here.”
Head of U.S. equities and fund manager at Artemis, Cormac Weldon, even projects a 20% jump in the USD ahead as the “dollar shock” continues on an interest rate hike later in the year.
“I think it depends how far and how fast interest rates go up,” Weldon said. “We think a (U.S.) rate rise will be relatively gentle but by the end of next year perhaps they could be over 100 basis points. So yes, we do believe it is more likely to have further dollar strength.”
Meanwhile, currency traders who are looking to profit off weakness in the EUR can utilize inverse euro-currency ETF options. For example, the ProShares Short Euro (NYSEArca: EUFX) provides 100% of the inverse or opposite return on the U.S. dollar price of the euro. The ProShares UltraShort Euro (NYSEArca: EUO) provides 200% of the inverse return of the U.S. dollar price of the euro. Lastly, the Market Vectors Double Short Euro ETN (NYSEArca: DRR) also provides a -200% exposure to the euro.
For more information on the forex market, visit our currency ETFs category.
Max Chen contributed to this article.