During the week ending on Sept 16th, traders of speculative and levered ETFs/ETNs stampeded away from foreign currencies and towards the US dollar. Among a universe of more than 250 "speculative" ETFs (including ultra & inverse funds popular with short term traders), funds flowed towards US dollar positions and away from all manners of foreign currency ETFs.
The week's largest net recipient of funds was UUP (PowerShares DB US Dollar Index Bullish Fund), which saw its assets increase by more than 25%, or $357M. Also gaining were Euro bear funds like EUO (ProShares UltraShort Euro) and traditional equity bear funds SDS (ProShares UltraShort S&P500) and SH (ProShares Short S&P500).
Losing assets this week were all forms of foreign currency funds including emerging CEW, Euro FXE, Japanese Yen FXY, Swiss Franc FXF, and Aussie Dollar FXA. Especially noteworthy was the Euro fund which had investors redeem nearly half of all outstanding shares despite relatively stable (+1% for the week) share prices.
Tread lightly with short dollar exposure. Speculative ETF traders appear to have strong conviction that the risk/reward of long dollar is much more attractive than it was a week ago.