Jim Woods

Bet On the Bouncing Buck With Dollar ETFs

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These days it seems as though the U.S. dollar is made out of rubber, not paper. After all, rubber bounces up, down and all around, while paper is flat.

Take a look at the chart of the U.S. Dollar Index below, a measure of the value of the greenback versus a basket of six major foreign currencies. Even a cursory glance reveals a very volatile, very bouncy buck.

As you can see, the dollar plunged in December, and then roared back off its December low all the way to a new 52-week high in March. The greenback then plunged again later that month, only to make a solid move higher by mid-April. That move higher didn't last long, however, as the greenback once again descended back to its December lows.

True to recent form, the dollar hasn't taken the latest sell off lying down. Since falling to its June low, the greenback has mounted another comeback.

Which way the buck will bounce next is anyone's guess, but regardless of which direction the dollar goes, there are two great exchange-traded funds (ETFs) that allow you to make money whether the greenback is up or down. (Learn five advantages ETFs offer.)