- Currencies trade in pairs – if something goes up, something else is going down.
- There are many derivative plays offered by forex, which can be realized in the stock market.
- Buying and selling foreign companies is one way to play the US dollar.
- Many foreign companies are traded on US exchanges via ADRs.
- Sberbank provides a great play on USDRUB carry trade.
With the EUR/USD around 1.15, there’s talk about the US dollar being in a downtrend. As we’ve explained in previous articles, there are many ways to trade forex without actually trading forex. That’s because the forex market is largely a derivative itself. Unless you are actually sending money to another country, you aren’t really in the forex market. If you have a forex account and trade, you are betting on the rate of change of the currency pair. It is completely artificial, a complete derivative. But this derivative, the rate of exchange from one currency to another – impacts all markets.