The stronger British currency can also help bolster returns for United Kingdom ETFs that do not hedge against currency risks. For instance, the iShares MSCI United Kingdom ETF’s (NYSEArca: EWU) tracks U.K. companies and is exposed to shifts in the Forex, so an expanding U.K. market coupled with a stronger pound could translate to greater U.S.-dollar returns.
“Forward contracts based on the sterling overnight index average, or Sonia, still suggest that a full quarter-point increase to the U.K.’s 0.5 percent official rate won’t come until November 2016,” according to Bloomberg.
CurrencyShares British Pound Sterling Trust
