After muted gains earlier this year, the dollar is soaring again. Particularly after the presidential election, the dollar has been rising on the expectation of higher growth and rising interest rates in the US. Last week, the dollar rose to a 14-year high against a basket of currencies of major trading partners.

The Fed Fund futures currently suggest a 93% probability of a rate hike at the Fed’s December meeting. Some of the recent economic reports have further bolstered the case for higher interest rates. On the other hand, other major central banks are still pursuing ultra-accommodative monetary policies. This monetary policy divergence supports the dollar.

US companies hold about $2.5 trillion in cash abroad. On the campaign trail, Trump had promised a one-time cut off the repatriation tax to 10%. We don’t know how much of this cash is in dollars and how much in other currencies but even if a part of this held in foreign currencies is repatriated, it would send the dollar much higher.

Investors can consider a couple ETFs to profit from the dollar surge. To learn more about PowerShares DB US Dollar Index Bullish Fund (UUP - Free Report) and WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU - Free Report) , please watch the short video below:

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