With this program, you are not trading the dollar versus a single foreign currency, but instead versus (or in terms of) a basket of currencies closely connected to the dollar. Therefore, this program offers you an efficient, straightforward method for investing in your view of the future strength of the US dollar and by extension the American economy.
Developing a program offering unbalanced risk and reward takes
years of research and testing. With our index programs, the work
has been done for you—by the creators of the renowned FXCM
Sentiment Programs.*
2. Portfolio Diversification
The FXCM Enhanced Dollar Index Programs can act as stand-alone investments; they also provide asset diversification:
Dollar index programs offer instant diversification for equity—and bond-intensive portfolios. Forex markets don’t move in lockstep with equity and fixed income markets. Accordingly, adding a currency-based index program to your existing investment portfolio can potentially smooth out returns—in both rising and falling markets—over the long term.
If you have investments denominated in foreign currencies, a bullish-dollar position counteracts the currency effect, providing a hedge against weakness in overseas economies.
Similarly, if you have investments denominated in dollars, a dollar-bearish position provides a portfolio counterweight to your dollar exposure.
3. Leverage**
To enlarge an individual investment and its consequent profits (or losses), FXCM Enhanced Dollar Index Programs provide higher leverage, as high as twice the leverage of other index programs, but it fluctuates depending on market conditions. At the same time, the program aims to reduce losses. Note: Should abnormal currency market conditions prevent the program from reducing the potential loss, the higher leverage could double the loss as well as the gain.
*The Bull and Bear programs of the FXCM Enhanced Index Programs will perform contrary to each other as they seek to profit off opposing views of the dollar. Through the use of active strategies, the FXCM Enhanced Index Programs aim to bias returns to the upside, i.e., to provide larger gains if the currency in one program moves in its selected direction, while minimizing losses in the counter-program.
**Without proper risk management, a high degree of leverage can lead to large losses as well as gains.
