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How to Profit From the Dollar's Recovery

Zoe Van Schyndel, CFA
August 20, 2008

Unless you've been hiding in a cave for the past several years, you know just how hard the U.S. dollar's value has been hit. Yet despite ongoing concerns about weakness in the economy, the dollar has reversed its seven-year slide in recent months, rising nearly 10% against the euro.

It's hard to say whether this reversal of fortune will last. But an exchange-traded fund that focuses on a strong greenback, the Powershares U.S. Dollar Bullish Fund (AMEX: UUP  ) , offers investors an opportunity to benefit if the dollar keeps rising.

Fund facts

  • Inception date: Feb. 20, 2007.
  • Expense ratio: 0.50%.
  • Net assets: $736 million.

Fund specifics
The Dollar Bullish fund tracks Deutsche Bank's (NYSE: DB  ) Long U.S. Dollar Futures index. The index is made up of futures contracts that will go up in value if the dollar strengthens against the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.