How to Profit From a Reversal in the Dollar

A stronger U.S. economy and its status as a safe-haven currency have helped the U.S. dollar strengthen in recent months as other major currencies such as the euro, Japanese yen, and British pound have slumped. But the mighty dollar could be set for a sharp reversal in the months ahead. The Federal Reserve's latest actions to purchase bonds and mortgage securities is increasing the supply of dollars. At the same time, the coming fiscal cliff threatens to put the kibosh on America's nascent economic recovery, which could spur even more dollar-deflationary action from the Fed.

In today's video, Matt and Paul discuss the potential for a weaker dollar and what it could mean for investors. They also share a few investment ideas that could actually benefit from a declining dollar. What the following video to get the names.

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The article How to Profit From a Reversal in the Dollar originally appeared on Fool.com.

Matthew Argersinger owns shares of MercadoLibre. Paul Chi owns shares of Arcos Dorados and has options on Arcos Dorados. The Motley Fool owns shares of Arcos Dorados, McDonald's, and MercadoLibre. Motley Fool newsletter services recommend McDonald's and MercadoLibre. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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