After getting punched around in recent weeks, euro currency ETFs have surged 2.6% in the last week alone. The question being asked now is, “Is the worst over?”
The most recent news emerging from Europe is hardly music to anyone’s ears:
- A downgrade of Greece’s credit rating to “junk” status by Moody’s Investors Service Tuesday
- The European Central Bank’s saying it will place a 5% charge on banks exchanging beaten-up Greek bonds for cash
- Growing worry about the ability of Spanish banks and companies to access international capital markets
- Rumors that Spain will need European Union help
- Disappointment over German investor sentiment
- Jumping borrowing costs for Greece, Spain and Portugal, reports Neil Shah for The Wall Street Journal.
In response, analysts seem to be scratching their heads over the euro’s eventual direction from here: higher, lower or stay put. For days now, there’s been a strange disconnect between global stock markets and the euro, which have risen, and Europe’s bond markets, which have suffered.
- Market Vectors Double Short Euro ETN (NYSEARCA:DRR)
- ProShares Ultra Euro (NYSEARCA:ULE)
- CurrencyShares Euro Trust (NYSEARCA:FXE)
Gold has begun to trade flat, but if the eurozone worries continue, investors may continue to seek gold exposure. Intelligent Investing on Forbes reports that gold ETFs may be the easiest bet for most investors, since depending on the fund type, they eliminate the need for finding storage, rolling futures or picking single stocks.
Some of the growing number of gold-focused ETFs include:
- SPDR Gold Shares (NYSEARCA:GLD): Holds physical bullion.
- ETFS Physical Swiss Gold Shares (NYSEARCA:SGOL): Holds physical bullion.
- Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ): Holds the stock of small- and mid-cap gold mining companies.
- iShares COMEX Gold Trust (NYSEARCA:IAU): Holds physical gold bullion.
- PowerShares Global Gold and Precious Metals Portfolio (NASDAQ:PSAU): An equity fund that holds miners of gold and other precious metals.
Tisha Guerrero contributed to this article.