David Fry's  Instablog

David Fry
Send Message
David Fry writes a subscription newsletter focused on technical analysis of exchange-traded funds, called ETF Digest (www.etfdigest.com). Dave founded the ETF Digest in 2001 and was among the very first to see the need for a publication that provided individual investors with information and... More
My company:
ETF Digest
My blog:
Dave's Daily
My book:
Create Your Own ETF Hedge Fund, a DIY ETF Strategy for Private Wealth Management.
  • Top 10 Established Currency ETFs 0 comments
    Mar 23, 2012 4:35 PM | about stocks: CEW, DBV, FXA, FXC, FXS, FXF, FXB, FXY, FXE, UUP, UDN

    Confidence is what gives currencies their credibility. The U.S. dollar went off the gold standard with the Bretton Woods's agreement during the Nixon administration. This was done because more dollars were being printed than there was gold to back them (55% to 22%). Taking the U.S. off the gold standard, the BW agreement made the dollar the world's reserve currency. This meant many commodities were priced in dollars. Some currencies were permitted to float freely while others maintained a "currency peg" to the dollar. As of late 2011 the U.S. Dollar is still nearly 70% of foreign reserve holdings.

    With expansionary dollar monetary policies post the 2001 and then 2008 bear markets investors started losing faith in the dollar given supply. And, this sentiment was transferred later to other fiat (paper money) currencies in general as 2011 euro zone debt issues surfaced. For U.S. citizens' purchasing power is being lost and investors look to the forex (foreign exchange) to hedge their dollar exposure or speculate in markets. ETPs (ETF/ETN) have emerged as an easier, less complicated and less leveraged manner to participate in these markets.

    As a former CTA (Commodity Trading Advisor) and CPO (Commodity Pool Operator), I know the value of having an allocation to direct currency ETPs. It's essential to have exposure to these new instruments to hedge against dollar destruction not to mention exposure to gold.


Back To David Fry's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.