|Bid||108.00 x 1000|
|Ask||0.00 x 1000|
|Day's Range||112.38 - 112.71|
|52 Week Range||108.32 - 120.65|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.40%|
The C urrencyShares Euro Currency Trust (FXE) is lower by nearly 3% over the past month and some foreign currency market observers believe the euro has more near-term downside in store against the dollar. Investors looking to take advantage of that trend may want to consider currency-hedged exchange traded funds, including the X-trackers MSCI EMU Hedged Equity ETF (DBEZ) . DBEZ “seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI EMU IMI U.S. Dollar Hedged Index.
To help investors keep up with the markets, we present our ETF Scorecard. The Scorecard takes a step back and looks at how various asset classes across the globe are performing. The weekly performance is from last Friday’s open to this week’s Thursday close.
The dollar softened against a broad range of currencies on Thursday as investors anticipated the minutes of the last Federal Reserve meeting and Friday's June employment numbers. Industrial orders in the largest economy in the European Union reported an increase of 2.6% in May compared in a 2.5% decline in April. Reports that the Trump administration could be planning to hold off on imposing tariffs on cars imported from the European Union if the bloc eliminated duties on U.S. cars also prompted gains for the markets.
A widely anticipated European summit takes place in June 2018. Discover four ETFs to trade European equities and the euro, both long and short.
The US Dollar Index (UUP) posted four consecutive daily declines in the previous week as trade tensions escalated between the US and its trading partners. The interesting thing, however, was that the decline in the US dollar was because of the declining bond yields rather than appreciation of other currencies. The increased positive correlation between the US dollar and the US bond yields was the key driver in the US dollar rally in recent weeks.
The US Dollar Index (UUP) managed a sharp recovery last week. The appreciation seemed to be due to tariff announcements instead of the Fed’s hawkish tone after the May FOMC meeting. The only interpretation of the rise in the US dollar would be that investors were seeing trade tensions as a temporary setback to global trade, which could result in a better deal for the US. The US Dollar Index closed for the week ending June 15 at 94.78 and appreciated 1.3%.
Investors should keep a close eye on the ETFs that are especially volatile this week with key events like Fed and ECB meeting as well as US-North Korea summit.
The euro currency and related exchange traded funds retreated as a political upheaval in Italy fuels concerns that the third-largest Eurozone member could pull out from the currency bloc. The C urrencyShares Euro Currency Trust (FXE) fell 1.1% Tuesday with the euro currency now trading around $1.1542, its lowest level in six months. “There’s an existential threat hanging over the single currency if we head into more elections this summer, I don’t know how we get away from that now, given the scale of the financial implications,” Kit Juckes, chief foreign exchange strategist at Société Générale, told the Wall Street Journal.
The US Dollar Index (UUP) continued to appreciate but did so slowly in the week that ended on May 25. Rising political uncertainty in Europe, seesawing trade negotiations between the United States and China, and the diplomatic tussle between the United States and North Korea had an impact on currency markets in the week.
Last week, the US dollar (UUP) index bounced back from a minor pullback in the week ended May 11. Both are positive for the US dollar. According to the latest Commitment of Traders report released on May 18 by the Chicago Futures Trading Commission, large speculators and traders have trimmed their short positions on the US dollar index.
The US dollar index (UUP) took a breather last week, closing at 92.44, 0.03% higher than its close of 92.41 in the week ended May 4. The US dollar’s three-week rally was interrupted by the weak inflation report published last week, which was preceded by a weak jobs report on May 4. This US dollar slowdown could only be a speed breaker as the Fed remains the only central bank expected to tighten policies in the near term. The recently rejuvenated dollar-bond market correlation could continue supporting the dollar against major developed, developing, and emerging market currencies.
In April, the US dollar index posted one of its best monthly gains (2.0%) since November 2016, and it looks set to continue with the trend this month. The main reason for this appreciation has been a higher positive correlation between the US dollar and bond yields. Rising bond yields increase the US-international bond spread, which increases preference for US bonds as they have better ratings.
The ECB (European Central Bank) left its policy unchanged at its April meeting, squashing any hopes for tightening in the near term. In response to the ECB’s post-meeting statement, the euro-US dollar exchange rate edged lower and tested lows last seen in January. This reaction was surprising, as the ECB had indicated that it was optimistic about the economy.
At its April policy meeting, the ECB (European Central Bank) maintained the view that EU (European Union) inflation could eventually reach its 2% target. Recent inflation data has not been encouraging, with inflation falling to 1.1% month-over-month in February. March inflation data was mildly positive, with annual inflation (WIP) rising to 1.3%, mainly because of food price inflation. While the ECB previously projected that inflation would hit 2% in 2019, it has a long way to go before meeting that target.
The US dollar (UUP) gained some lost ground last week due to reduced risk aversion, rising bond yields, weak economic data from global peers, and higher commodity prices. The US dollar rallied after bond yields started to rise and the ten-year yield broke past the February 2018 high. Economic data from the US included an acceptable level of retail sales and an optimistic Federal Beige Book. The US Dollar Index closed above 90.0 for the first time in five weeks and posted a weekly gain of 0.65%.
The euro-US dollar (FXE) exchange rate closed the week ended April 13 at 1.2, with the euro appreciating 0.39% against the dollar (UUP). The European currency, which failed to capitalize on the weaker US dollar, was impacted by soft economic data and cautious comments from the ECB (European Central Bank). The ECB keeps pushing away any talk of tightening, leaving investors wanting more as the economy seems to be on a continued path of recovery.
The US dollar (UUP) came under pressure after Donald Trump, in a tweet, accused Russia and China “playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!” Trump’s complaint has been interpreted as an attempt to escalate tensions to achieve favorable trade negotiation terms. According to the latest Commitment of Traders report, released on April 13 by the Commodity Futures Trading Commission, large speculators and traders have increased their short positions on the US dollar for a third consecutive week. This amount is a combination of the US dollar’s contracts against the combined contracts of the euro (FXE), British pound (FXB), Japanese yen (FXY), Australian dollar (FXA), Canadian dollar (FXC), and Swiss franc.
The US Dollar Index appreciated for a fourth consecutive week due in part to the impressive industrial production and consumer confidence numbers that were reported at the end of the previous week. Earlier in the previous week, lower-than-expected inflation growth and retail sales numbers had little impact on the US dollar as markets have already priced in a rate hike from the US Fed at its March meeting. The turmoil in the White House had a marginal negative impact on the US dollar as the pressure from the Mueller probe reached the Trump businesses last week.
The euro-dollar (FXE) exchange rate closed the week ending March 2, 2018, at 1.23. The major factors that drove the euro in the previous week were the election and political uncertainty in Italy and Germany. Over the weekend, Italy had a hung parliament verdict.