ETFs to Play with the Dollar at 14 Year Low vs. Yen (UDN, UUP, FXY)

U.S. Dollar - Weak Dollar

Its no secret, the disappearing Dollar is now at its greatest weakness to the Yen which is at a 14-year high when compared to the greenback.  If you believe the trend will continue then buy the PowerShares DB US Dollar Index Bearish (NYSE:UDN) and the CurrencyShares Japanese Yen Trust (NYSE:FXY). However, if the American dollar can stage a comeback your weapon of choice is the PowerShares DB US Dollar Index Bullish (NYSE:UUP) which hit a new 52-week low on Friday of $22.02 a share.

Just looking at the last six months, the UDN and FXY have moved up 8% while the UUP has fallen 8%. On Friday the DB US Dollar Index Bearish (NYSE:UDN) closed at $28.87 and the CurrencyShares Japanese Yen Trust (NYSE:FXY) at $113.72.  The yen climbed to a 14-year peak against the dollar on Thursday but the market does not believe Japanese authorities will intervene anytime soon because the move reflects broad dollar weakness, not yen strength.

WHAT WOULD TRIGGER INTERVENTION? Noguchi believes its just one thing -- Speed.

If the dollar's fall accelerates against the yen and implied volatility rises above 20% -- which would signal a disorderly move -- market players would begin to see a serious chance of coordinated intervention.

Analysts say the market would grow warier of intervention risk if the dollar falls to 85.00 yen, 80.00 yen or its record low of 79.75 yen. But speculators tend to use round figures as targets at which to take profits, which tends to slow the rise.

To learn more about the CurrencyShares Japanese Yen Trust (NYSE:FXY) click here to visit their site. has covered the Bearish and Bullish Dollar ETFs on numerous occasions, click to ticker to review and learn more about those funds:

Happy Safe investing and let's hope for all of us the dollar begins to stage a comeback.

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