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Tickers in this Article: FXY, FXE, FXB, GLD, DBV
Betting against the U.S. Dollar has been a one way ticket to profits for the better part of the last decade. And whether the recent reversal is one that will last or will be just an intermediate turn in an ongoing dollar bust remains to be seen.

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Either way, there are profits to be made in the currency market, no less than in equities, fixed income and commodities. Picking the currencies is, of course, the challenge - if investors have to pick at all. If the U.S. buck remains bullish, the best bet is to buy U.S. Dollar denominated assets. If not, here is a sampling of currencies that could outperform.

Of the big names in the currency game, the Japanese yen should be near the top of every investor's list of desirables going into 2010. Last year, the Yen offered only marginal gains against the U.S. Dollar, but Japan's position as an Asian trade hub, her proximity to an ever expanding Chinese economy and a new push to make the country less reliant on exports to drive growth should all play in the yen's favor. The CurrencyShares Japanese Yen Trust (NYSE:FXY) seeks to match the movement of the Japanese yen vis-à-vis the dollar, plus accrued interest. (For related reading, see The U.S. Dollar And The Yen: An Interesting Partnership.)

Japan and Europe are the Obvious Choices
The other obvious bet against a rise in the U.S. currency is the euro. In 2009, the euro managed a roughly 5% gain against the dollar, as measured by the CurrencyShares Euro Trust (NYSE:FXE).

Though closely related to the euro, the British pound still moves independently against the dollar and is less subject to the wider economic swings that obtain between countries on the European continent. The pound has stabilized over the last half year after worries about that nation's banking system eased. In 2009, the pound gained over 11% against the dollar and may be the strongest of three aforementioned plays going forward. Pound bulls should try the CurrencyShares British Pound Trust (NYSE:FXB).

Alternatives for the Addle-Headed
For those unclear on which direction currencies will run in 2010, there are two more options: gold and strategy. Gold is viewed by many as a currency and by an increasing number as the current currency of choice. Interested parties might consider the SPDR Gold Trust (NYSE:GLD).

For those wanting a more strategic approach to the question, consider the Powershares DB G10 Currency Harvest Fund (NYSE:DBV), a product that takes a long leveraged position on currencies from countries that have relatively high interest rates, and a short position on countries with relatively low interest rates. Leverage used is roughly 2:1, long to short. The fund had a steady performance last year, turning in 20% gains for investors.

The Bottom Line
Where the American Dollar goes in 2010 will determine the profitability of the entire currency spectrum this year. If you're a dollar bull, focusing on bread and butter investments is your best strategy. But if the dollar continues to fall, at least one of the above mentioned funds should turn in a bundle. (For more, see Taking Advantage Of A Weak U.S. Dollar.)

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