Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Bullish On The U.S. Dollar? Bearish The Euro? 2 ETFs For Either Outlook

By Investing.com (Tezcan Gecgil/Investing.com )ETFsOct 06, 2021 17:02
ph.investing.com/analysis/bullish-on-the-us-dollar-bearish-the-euro-2-etfs--for-either-outlook-93400
Bullish On The U.S. Dollar? Bearish The Euro? 2 ETFs For Either Outlook
By Investing.com (Tezcan Gecgil/Investing.com )   |  Oct 06, 2021 17:02
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Currency exchange-traded funds (CETFs) have become popular among investors who want to participate in FX moves. According to the Bank for International Settlements’ Triennial Survey of 2019, global daily foreign exchange trading is worth more than $6.5 trillion. And London has a tight grip on these transactions, accounting for well over 4% of global FX turnover.

Research by Robert B. Burney of Coastal Carolina University suggests:

“Because currency ETFs typically have small minimum transaction sizes and trade like equities, they represent an easily accessible alternative for the small investor or small business operator.”

We previously discussed several funds that could be appropriate for:

Today, we introduce two more funds for US dollar bulls and euro bears. In recent weeks, Wall Street has been watching the greenback surge against many currencies, in part, due to rising expectations for interest rate hikes in the US.

Expected tapering by the Fed is likely to provide further tailwinds for the dollar as well.

Finally, investors who buy CETFs that bet on the strength of the dollar sometimes use these funds as a potential hedge against declines in equities. Given the recent volatility in many US stocks, investors debate whether a significant decline in equities could be around the corner.

With that information, here are two currency ETFs.

1. WisdomTree Bloomberg US Dollar Bullish Fund

Current Price: $25.91
52-Week Range: $24.88 - $26.63
Dividend Yield: 0.66%
Expense Ratio: 0.51% per year

The WisdomTree Bloomberg US Dollar Bullish Fund (NYSE:USDU) gives exposure to moves in the US dollar against a basket of foreign currencies from both developed and emerging markets. The fund, which benefits as the US dollar appreciates, tracks the returns of the Bloomberg Dollar Total Return Index.

USDU Weekly Chart.
USDU Weekly Chart.

USDU began trading in December 2013. Its net assets stand at $112.1 million. This currency ETF saw a 52-week high of $26.63 exactly a year ago, on Oct. 6. It hit a 52-week low of $24.88 in late May. So far in 2021, USDU has returned 3.67%.

By comparison, the Invesco DB US Dollar Index Bullish Fund (NYSE:UUP) is up 3.96% this year. As previous articles have discussed in detail, UUP provides exposure to the US Dollar Index futures contracts that trade on the ICE Futures US exchange. That index does not have exposure to emerging market currencies.

Investors who are bullish on the greenback could consider investing in USDU around these levels.

2. ProShares Short Euro

Current Price: $44.02
52-Week Range: $40.56 - $44.24
Expense Ratio: 0.95% per year

The ProShares Short Euro (NYSE:EUFX) is an inverse ETF (covered recently here). Its objective is to achieve daily investment results, which correspond to the inverse (-1x) of the daily performance of the price of the euro versus the greenback. Put another way, the fund benefits when the euro grows weaker relative to the US dollar.

EUFX Weekly Chart.
EUFX Weekly Chart.

So far in 2021, EUFX is up 6.44%. As currency market moves tend to continue over long periods, the weakness we’re seeing in the euro against the greenback could continue for some time.

Short-term traders who are bullish on the USD might want to research the fund further.

Note that inverse funds are not appropriate as long-term holdings and are better suited for daily traders. Therefore, they are not appropriate for most investors.

Bullish On The U.S. Dollar? Bearish The Euro? 2 ETFs For Either Outlook
 

Related Articles

Bullish On The U.S. Dollar? Bearish The Euro? 2 ETFs For Either Outlook

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email