The Dollar is King
David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
While the Euro has risen strongly since the onset of 2012, this is not likely to last. Think about it like this; would you rather hold your money in a currency long known to be a world safe haven (US Dollar), or would you prefer to hold currency in a union which is unstable and on the brink of collapse. Lets face it, the cheap credit swaps and temporary liquidity which the United States Federal Reserve is now offering European banks will not solve the Euro crisis. Yes, Bernanke's actions have impeded the growing strength of the dollar, but I am convinced that as the Eurozone situation moves towards a climax, the people of the world will recite in unison "In America We Trust", while simultaneously exchanging their currency into US Dollars and/or Treasuries.
The US Dollar or my preferred method of trading it, PowerShares DB US Dollar Index Bullish Fund (NYSEMKT: UUP) has recently entered oversold territory and technical indicators, as well as the fundamentals explained above, are anticipating a rebound. I recommend this ETF as a hedge against potential equity losses that could be suffered in a collapse of the Euro.
If you are feeling the need to spice it up a little and have good tolerence for risk feel free to use the 3x leveraged version of the above mentioned ETF (NYSEMKT: UUPT)
I hold long positions in both UUP & UUPT