Some exchange-traded funds (ETFs) permit you to make investments that will gain ground if the U.S. dollar continues to decline:
* CurrencyShares, from Rydex Investments. There are eight ETFs to choose among, each representing bank accounts in euros, pounds, yen, Swiss francs, Mexican pesos, Swedish kroner, Canadian dollars, or Australian dollars. You’ll get the yield from the bank account, plus or minus the currency’s movement versus the U.S. dollar.
Recently, for example, the CurrencyShares Euro Trust was paying interest of 3.84 percent. If the euro gains 10 percent vs. the U.S. dollar this year, the total return to U.S. investors would be 13.84 percent. However, a gain of 3.84 percent or more by the U.S. dollar against the euro would generate a net loss for U.S. investors.
* PowerShares DB US Dollar Index Bearish engages in options trading. In essence, it sells short the U.S. dollar, vs. a basket of six foreign currencies. If the dollar loses value, this ETF will have a profit on the short sales.
