When Euro ETFs Break Range, Stocks Will Likely Follow

By John Spence: An exchange traded fund that follows the euro’s movements against the U.S. dollar was fractionally lower Monday after the currency hit seven-month lows versus the greenback. The euro “was seen still vulnerable over the next few weeks on persistent fears of a Greek default and the risk of contagion in the region’s banking system and larger economies,” Reuters reported Monday.

Tom Lydon submits: Since stocks and commodities seem to take their cues from the U.S. dollar, many traders are trying to determine if the greenback’s rally is simply a technical bounce or a sign that investors are shunning risk.

Tom Lydon submits: Equity exchange traded funds pulled back in Monday’s sell-off but Krispy Kreme (NYSE: KKD) shares bucked the downtrend with a 26% rally.

By Tom Lydon: European stocks pared early losses Monday after Italian Prime Minister Silvio Berlusconi denied reports he plans to resign before a key vote in parliament.In currency exchange traded funds, CurrencyShares Euro Trust (NYSEArca: FXE) was down fractionally in premarket trading on the latest development in Europe’s debt crisis. The ETF follows the euro’s movements relative to the U.S. dollar.

Tom Lydon submits: Exchange traded funds tracking the euro’s movement against the dollar were set for a flat open Wednesday after the Greek government won a vote of confidence in parliament, which leads the way to creating an austerity plan to lock in a new bailout from the European Union and International Monetary Fund. CurrencyShares Euro Trust (NYSEArca: FXE) was little changed in Wednesd

Andrew Hart submits:Over the last month the Euro lost almost 7% (and more than double that YTD) with the primary beneficiary being the US dollar and Japanese Yen.

By John Spence: Exchange traded funds that invest in stocks and the euro rallied Monday with investors hoping equities ETFs have put in a short-term low as European markets firm somewhat before a key meeting this week.

Tom Lydon submits: Exchange traded funds tracking U.S. stocks and the dollar tended to move in opposite directions during the credit flame-out and stimulus-fueled recovery, with many equity rallies coming at the greenback’s expense. However, some analysts have pointed out that the dollar and stocks have both moved lower in recent weeks. This could be a troubling trend, because a similar pattern developed before the market tanked in 2008.