Currency ETF’s Offer Protection Against A Weak U.S. Dollar

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October 26, 2009 12:00pm NYSE:BZF NYSE:CEW

dollar-declineAt the beginning of the crisis the dollar rose as investors protect theirs funds by investing in safe currency. The dollar rose by 20 percent between July 2008

 and March this year. But when markets calmed down the whole process is reversed. Since then, the dollar has lost most of the profits.

“USD dollar further weakens against major global currencies. Last weak it reached magical support 1.50 against EUR. Investors, especially US investors, seek to hedge their positions against falling dollar. One alternative are currency ETFs and ETNs.

“We can call WisdomTree as the biggest currency ETF issuer currently covering Euro (EU), Japanese Yen (JYF), Brazilian Real (BZF), Indian Rupee (ICN), New Zealand Dollar (BNZ), Chinese Yuan (CYB) and South African Rand (SZR), US Current Income Fund (USY) and recently released emerging currency ETF (CEW). Last fund provides access to currencies in emerging markets and soften the volatility and brings exposure to high yield money market rates across emerging world (Turkey 9,1%, Brazil 7,9%South Africa 7,3% etc).


Additionally they have in the pipeline new currency exchange funds for many individual countries in Central and Eastern Europe, Asia Pacific and currency basket funds Emerging-Asia, Emerging Europe, Emerging Latin America or Gulf currency basket ETF.

Another issuer of currency ETF is Rydex with Australian Dollar (FXA), British Pound (FXB), Canadian Dollar (FXC), Euro (FXE), Japanese Yen (FXY), Mexican Peso (FXM), Russian Ruble (XRU), Swedish Krona (FXS}, Swiss Franc (FXF).

Other smaller issuers of currency funds are Barclay iPath ETN, Elements offering more or less the same funds for major world currencies already mentioned above. Last issuer is Morgan Stanley (Van Eck) with specialty for double long EUR (URR) and double short EUR (DRR).

Visit Emerging Index: HERE


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