Currency ETFs try to reflect the performance of a single currency or a basket of currencies. ETF providers structure their currency funds to try to reflect the movements of a currency in a foreign exchange market by holding foreign currencies directly, foreign currency denominated short-term debt instrument, derivatives or swaps.
Related: Currency Hedged ETFs Offer a Smoother Long-Term Ride
Overseas central banks have implemented low interest rate and even negative interest rate policies, which have helped push down yields across the world – there is almost $8 trillion in global bonds with negative yields.
“Fed Bank of San Francisco President John Williams said Britain’s vote to exit probably won’t derail the U.S. economy and a rate increase is still possible this year,” reports Bloomberg.
For more information on Currency ETFs, visit our Currency-Hedged category.
PowerShares DB U.S. Dollar Index Bullish Fund