The US dollar has become the strongest currency in the world for a lot of good reasons. A strong dollar benefits such things as international travel and imported goods and materials. Our dollar strength is primarily due to the fact that the US economy is the stronger than South America, Europe, Asia and Emerging Markets. As our Fed (central bank) is ending our Qualitative Easing, places like Europe’s ECB is just talking about starting theirs to boost the economy. The Russian Ruble has all but collapsed and inflation is already running at 10%.
So how can you invest in something to take advantage of this situation? One simple way is to invest in the PowerShares DB US Dollar Bullish ETF “UUP”. Behind the scenes this stock index is made up of long futures contracts. These contracts are long (betting the price will go up) the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. The UUP can be easily bought and sold just like any other stock. It has plenty of liquidity, trading over a million shares per day on average so there is no problem buying or selling.