For investors seeking momentum, Guggenheim CurrencyShares Euro Trust (FXE - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 13.2% from its 52-week low price of $100.46/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
FXE in Focus
This Euro ETF seeks to track the price of the euro relative to the U.S. dollar, net of Trust expenses, which are expected to be paid from interest earned on the deposited euros. The value of the fund increases when the euro strengthens and declines when the dollar appreciates. It has amassed $377.7 million in its asset base and charges 40 bps in fees and expenses. FXE could be appropriate for investors seeking to hedge exchange rate exposure or bet against the greenback (see: all the Currency ETFs here).
Why the Move?
The currency euro has been an area to watch lately given its meteoric rise in the anticipation of policy tightening by the European Central Bank (ECB) and improving Eurozone fundamentals. Additionally, the weakness in U.S. dollar is providing another tailwind to the currency as hopes in Trump’s administration are fading with investors’ turning cautious on growth reforms.
More Gains Ahead?
Currently, FXE has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems that FXE will remain strong given a high weighted alpha of 8.00% and a low 20-day volatility of 7.28%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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