Japanese Yen: Hedging against falling stock markets.
Source: http://stockweb.blogspot.com/2008/08/japanese-yen-hedging-against-falling.htmlPosted on Saturday, August 23rd, 2008 | In Stocks to Watch
Global stock markets are falling and most of them are in “bear” trend. But there is something new with commodity and currency prices. We can see sinking crude oil price and rebound for US dollar. Currency turnaround has started 1 month ago. Strengthening US dollar sent all currency ETFs to negative.
| name | ticker | monthly |
| PowerShares DB US Dollar Index Bullish Fund | (UUP) | 5.8% |
| CurrencyShares Japanese Yen Trust ETF | (FXY) | -2.5% |
| CurrencyShares Canadian Dollar Trust ETF | (FXC) | -3.7% |
| PowerShares DB G10 Currency Harvest Fund | (DBV) | -4.0% |
| CurrencyShares Swedish Krona Trust ETF | (FXS) | -5.2% |
| CurrencyShares Euro Trust ETF | (FXE) | -6.1% |
| CurrencyShares Swiss Franc Trust ETF | (FXF) | -6.2% |
| CurrencyShares British Pound Trust ETF | (FXB) | -6.7% |
| CurrencyShares Australian Dollar Trust ETF | (FXA) | -10.3% |
As you can see US dollar ETF has gained almost 6% in last month. The most averse currency against dollar strength seems to be Japanese Yen which lost only 2.5%. This slight drop is due to positive monthly trend with broad stock markets indices. During the same time Dow Jones Industrial Average increased by 0.3% and Nasdaq Composite by 4.8%. Yen is generally called is as a hedging tool against broad stock market trend with inverse correlation. Based on empirical data the highest correlation is with broad US indices (S&P500, Nasdaq Comp. and Dow Jones Ind.) which is -0.95.
Related tickers: (UUP), (FXY), (FXC), (DBV), (FXS), (FXE), (FXF), (FXB), (FXA), (DJIA), (SPY), (QQQQ)
Last 5 posts by Vlada Kynsky
- Jim Rogers about commodities, China and others. - October 25th, 2009
- How to invest in gold now. - October 18th, 2009
- ETF correlation - October 7th, 2009
- Treasury inflation protected securities ETF - October 4th, 2009
- How to invest in gold. - July 11th, 2009
crude oil price, Dow 30, Dow Jones Ind., Nasdaq Comp., PowerShares DB G10 Currency Harvest Fund, PowerShares DB US Dollar Index Bullish Fund, Stocks to Watch, United States
 About Vlada Kynsky (http://stockweb.blogspot.com/)
Vlada Kynsky studied economics and gained work experience as SAP analyst in information technology. His origin is in Czech Republic but due to different work assignments lived in many European countries. He explores mainly emerging markets. In his research he focuses on ETF and international stocks. Another area of interest are technology stocks. |
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