Euro Dollar Trade-Off

Investors have had a love-hate relationship with both the euro and the dollar in 2010 reports John Spence.

Risk aversion is a major driver of investor inflows into the dollar.  A major beneficiary is the PowerShares DB US Dollar Bullish Fund (UUP) which tracks the dollar relative to a basket of foreign currencies including the euro, Yen and British pound.

Movement into the dollar has meant a weakening euro as reflected in the CurrencyShares Euro Trust (FXE).  The $280 million ETF carries an expense ratio of 0.40%.

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