ETF Pick of the Week: Double Short Euro (DRR)

Includes: DRR, UUP
by: Carl T. Delfeld

Here's my ETF pick for this week: Market Vectors Double Short Euro (NYSEARCA:DRR)

DRR will move roughly 200% the inverse of the value of the euro.

Reasons for Selection:

1) Based on the Economist magazine's "Big Mac Index," the euro is among the most overvalued currencies in the world. Today, a Big Mac costs 50% more in euros than it does in U.S. dollars.

2) It appears that economies in the eurozone are about 6 months behind the US in terms of adjusting to inflated real estate prices and a slowdown in economic growth.

3) As slower growth becomes more of problem to policymakers than higher inflation, the European central bank will start cutting interest rates thus increasing pressure on the euro.

Catalyst: The downward trend of the euro is already developing a pattern and the euro recently fell through a trading range to the downside.

Tip: Remember that DRR is a leveraged ETF that moves twice the change in the value of the euro, so use sparingly. For those that want a direct play on the apparent resurgence of the US dollar, take a look at (NYSEARCA:UUP) but keep in mind that the US dollar has been up in 10 straight days.

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