Enter the Fiat currency exposure in this unique ETF


The momentum is squarely behind the dollar amid the Omicron variant, but diverse exposure to international currencies is available in the Invesco DB G10 Currency Harvest Fund (DBV).

As various countries grapple with the latest variant of COVID-19, the idea is that 2022 could bring more growth once the effects of the pandemic wear off. That said, the local currencies of these countries are expected to strengthen as economies improve and more central banks raise rates.

When fears of the Omicron variant abate, a sense of risk could push currencies higher against the dollar.

The dollar edged up against a basket of currencies on Thursday, but its gains were capped as fears of fallout fears from the Omicron coronavirus variant supported higher risk currencies such as the Australian dollar and the pound sterling, “said a US News World Report article said, noting that most of the major currency pairs were tied at a range before Christmas.

“We think the majors are likely to stay more or less limited during the holidays,” said Shaun Osborne, chief currency strategist at Scotiabank.

Diversified exposure to foreign currencies

DBV seeks to track changes, whether positive or negative, in the level of the Deutsche Bank G10 Currency Future Harvest Index â„¢ – Excess Return (DB G10 Currency Future Harvest Index ER or Index) plus interest income from fund holdings primarily of US Treasury securities and money market income less fund expenses. The fund is designed for investors looking for an economical and convenient way to invest in currency futures.

The index is comprised of forward currency contracts on certain G10 currencies and is designed to exploit the trend of currencies associated with relatively high interest rates, on average, tending to increase in value relative to currencies associated with relatively low interest rates. The G10 currency universe in which the index currently selects includes US dollars, euros, Japanese yen, Canadian dollars, Swiss francs, British pounds, Australian dollars, New Zealand dollars, crowns Norwegian and Swedish.

DBV is also an ideal tool for traders who wish to bet on short-term movements of international currencies as a whole. The fund seeks to track the index, which is designed to reflect the performance of an investment on a leverage basis of up to 2: 1 (immediately after rebalancing, which may then rise or fall) into positions long currency forwards for certain currencies associated with relatively low yielding interest rates and short positions in forward currency contracts for certain currencies associated with relatively low yielding interest rates.

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