The PowerShares DB US Dollar Index Bullish ETF (UUP) marks the start of a series of currency funds that we will cover in our next several ETF Talks. UUP tracks an index of USDX futures contracts that rises in value as the U.S. dollar appreciates.
Currency trading can be highly volatile and is not suitable for all investors. However, currencies also donâ??t really follow the market ups and downs, and are instead driven by their own factors, such as interest rates and political instability on a global-macro scale.
Trading directly in foreign currencies also requires a foreign exchange (forex) account and a lot of dedicated work. This is where currency exchange-traded funds (ETFs) like UUP come into play by giving investors a hassle-free way to invest in currencies.
Click here to read the rest of the article, “Highlighting a Fund for Those Bullish on the Dollar.“