“If you truly think that the euro has become a funding currency, then it will do this in ‘risk off’ periods,” Anezka Christovova, a currencies analyst at Credit Suisse, said in a Financial Times article.
On the other hand, if the risks dissipate, Eurozone investors may go right back to borrowing on low rates to fuel riskier foreign bets, which would further depreciate the EUR.
Consequently, more aggressive currency traders can capitalize on the turn in the European euro through inverse ETF options. For instance, the ProShares Short Euro (NYSEArca: EUFX) is designed to provide 100% of the inverse, or opposite, return of the U.S. dollar price of the euro, on a daily basis and the ProShares UltraShort Euro (NYSEArca: EUO) provides 200% of the inverse return of the U.S. dollar price of the euro on a daily basis. Additionally, the Market Vectors Double Short Euro ETN (NYSEArca: DRR) tracks the Double Short Euro Index, which also provides a -200% exposure to the euro.
CurrencyShares Euro Currency Trust
For more information on the EUR currency, visit our euro category.
Max Chen contributed to this article.