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Is a Euro Rebound Ahead?

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The euro has been among the worst performing developed market currencies and is down around 7% since the start of 2015. Is a rebound coming?

Despite the tiresome ongoing drama of whether Greece will default on its debt and remain a eurozone member, the euro has held up rather well during this period of semi-crisis. Over the past two months, the euro has actually climbed roughly 4.7%, an indication of its resilience.

Bull funds that use leverage like the ProShares Euro Ultra Fund (ULE) have jumped over 9% during the past two months while euro bear ETFs have slumped.

The euro’s rise might continue and some analysts believe the euro is undervalued relative to the U.S. dollar. Based on trade and investment flows, the euro’s fair value is $1.20, according to Peterson Institute for International Economics.

The CurrencyShares Euro Trust (FXE) is linked to the performance of the euro. FXE has $415 million in assets and an annual expense ratio of 0.40%.


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