How to Bet Against the Euro

We find ourselves in a very new environment seemingly out of nowhere as European elections have re-awakened concerns of Greece leaving the euro, and a breakdown in credit markets. I have addressed the idea that the U.S. dollar is likely to continue to rally because Europe in many ways needs a weak euro in the face of massive deflationary headwinds caused by government debt and low growth.

However, the better way to bet against the euro may actually be to bet against emerging market currencies. I first made the case for this by looking at the price ratio of the Currency Shares Euro Trust (FXE) relative to the Wisdom Tree Dreyfus Emerging Currency Fund (CEW) on April 23. At the time I noted that even though the euro was just beginning to trend lower, emerging market currencies were declining at a faster pace....211 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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