The US dollar continues to act very weakly. There are many global currency ETfs available on the market today that make it very easily for an investor to diversify by very easily switchng to foreign currencies.
Investors should be wary of diversification by using correlations. There is no point in investing in several currecnies that are highly correlated, either positively or negatively.We compiled the correlations of all currency ETFs and ETNs in the U.S markets. Below is the color-coded chart. Green or red indicate very high correlations, either positive or negative, either is bad.
(please click to enlarge)
So what currency ETFs are not correlated?
CNY (Remnibi) and AYT, BZF (Brazilian real), CEW (emerging), FXC (Canada)
DBV (G10) and CYB (Yuan)
FXC and FXB (Brittish)
FXM (Mexican peso) and BNZ (New Zealand dollar)
FXY (Yen) and CYB
SCR and INR
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These are the ETF names:
* SCR used to be Swedish Krona.