By Phillip Streible

The U.S. dollar has posted its biggest gain against the euro in more than eight years and I would expect it to continue higher. The greenback has seen a 4 percent jump against the European currency this month. The dollar rose to $1.49090 against the euro today (August 11).

The dollar seemed to have touched its low in early July after the U.S. Treasury and the Federal Reserve promised to support Fannie Mae and Freddie Mac to prevent a collapse in the housing market. I believe that this may have been the start of a long-term uptrend in the dollar.

A good way to take advantage of moves in the dollar is by trading U.S. Dollar Index futures. The Dollar Index is a weighted measure of the dollar with respect  to a basket of foreign currencies. These currencies include: the euro (57.6%), Japanese yen (13.6%), Pound sterling (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%), and the  Swiss franc (3.6%).

Because I am bullish for the long term, I would recommend buying calls on the Dollar Index. For specifics on an optimal strike and price recommendations, feel free to contact me.