The ETF to Own If Nations Ditch Dollar Pegs

The recently listed Barclays Asian and Gulf Revaluation ETN(PGD Quote) could turn out to be a unique product -- it's tied to currencies that are pegged to the U.S. dollar, or rather, managed to stay within a band around it.

An investment PGD is basically a bet that some dollar-pegged currencies will release their pegs to help combat inflation pressure.

At first glance, it would seem this fund could not go down in price.

Managing currencies so as to have a fixed exchange rate or a narrow band is done not because those currencies are weak, but because they are potentially too strong. If the currencies were allowed to free-float, they would go up against the dollar too fast, which would cause problems with regard to competitiveness which would hurt demand for these countries U.S. exports. ...