Trading was cut short on Wall Street last week after the destructive path of Hurricane Sandy battered the East Coast and forced the New York Stock Exchange to close on Monday and Tuesday. While trading volumes were understandably low, investors welcomed a slew of positive economic reports, which put some much-needed momentum back into the markets. In the United States, ISM Manufacturing, construction spending, consumer confidence, private sector job growth, and non-farm payrolls all came in better-than-expected. Investors, however, will be keeping a close eye on the presidential elections tomorrow, gearing up to see who will occupy the coveted Oval Office come January. This week, investors will once again see a number of economic reports from around the world. Below, we outline three ETFs that should see a fair amount of activity during the week ahead [see also 7 Simple & Cheap ETF Model Portfolio]:
1. CurrencyShares Australian Dollar Trust (FXA)
Why FXA Will Be in Focus: This fund is by far the largest and most popular options for investors looking to gain exposure to the price of the Australian dollar relative to the U.S. dollar. Its focus will come in earlier in the week, as the Reserve Bank of Australia is slated to announce its bank rate decision on Tuesday. Analysts are expecting the central bank to cut its rate by 25 basis points, from 3.25% to 3.00%. Investors should expect increased trading activity and possible volatility for this ETF [see also 17 ETFs For Day Traders].
2. CurrencyShares British Pound Sterling Trust (FXB)
Why FXB Will Be In Focus: FXB measures the GBP/USD exchange rate and bundles it in the form of an ETF. It is home to $72 million in assets and a relatively low daily volume of 26,000. It will be important to keep a close eye on FXB on Thursday as the Bank of England is slated to announce its rate decision and its asset purchase target. While the bank rate is expected to say the same, any deviations from analysts’ expectations could mean that FXB will be in for a volatile trading session.
3. CurrencyShares Euro Currency Trust (FXE)
Why FXE Will Be In Focus: This ETF offers exposure to the euro relative to the U.S. dollar, increasing in value when the euro strengthens and declining when the dollar appreciates. Investors should keep a close eye on FXE this week as the European Central Bank’s rate decision is reported on Thursday. Should this result be any different, FXE may see an increased level of activity, as the euro will likely react to any changes in the eurozone’s key interest rate [see also How To Pick The Right ETF Every Time].
Follow me on Twitter @DPylypczak
Disclosure: No positions at time of writing.