And so, necessarily, given how the ETF is made up, when the value of the U.S.
dollar declines vs. the Canadian dollar, it follows that the value of your units of DLR declines as quoted in Canadian dollar terms.
Not exact matches
However, I would note the more recent revival of mercantilism & a new willingness of many countries to diversify into real assets (rather than currencies / bonds)-- this could pose a new and more substantial / elevated risk of
decline for the
dollar as a reserve currency (
vs. the historical example of sterling).
Look closer though & there's a couple of mitigants: i) The government's rather silly prudence has probably been a negative, when most investors would prefer a focus on growth at all costs, and ii) the advantage of the pound's significant
decline vs. the US
dollar (& other global currencies) is offset by an equally significant appreciation
vs. the euro.