LauraMandaro

SAN FRANCISCO (MarketWatch) — These days it seems like global investors can’t get rid of their U.S. dollars fast enough.

Some timely investing strategies attempt to profit from this distaste. Foreign stocks, bonds and currencies, along with commodities, tend to rise when the dollar declines.

Even many true-blue American companies, such as Coca-Cola Co. KO, -1.63% can take advantage of a falling greenback because so much of their sales come from overseas.

All of these assets can get an easy boost from currency translation. When the dollar falls, another currency rises.

Commodities generally gain when the dollar loses because they are priced in dollars. Buyers of these commodities must spend more dollars to own an ounce of gold or a barrel of oil when the greenback is worth less.

And a U.S. company that sells goods in pesos, for example, gets a bonus when it translates those earnings or its share price into dollars.

Dollar daze

These trends have been in place since March. That’s when a surge in demand for stocks and currencies in countries seen as coming faster out of recession — such as Brazil — triggered a slide in the greenback.

Many analysts say it will be tough for the dollar to rebound much while the Federal Reserve keeps interest rates near zero percent and extends its special cash programs —two conditions that make the dollar attractive as a currency to borrow rather than buy. See related story on dollar carry trade.

The dollar index DXY, +0.91% which measures the U.S. dollar against a basket of its rivals, has fallen 14% since early March, when it had been trading near three-year highs.

The losses are even steeper against currencies from countries that export a lot of commodities, and which are expected to benefit from a coming wave of infrastructure building.

Since early March, the greenback has lost about 30% against the South African rand, 26% against the Australian dollar and 23% against the Brazilian real.

Meanwhile, emerging markets stocks — as measured by an exchange-traded fund that tracks the MSCI Emerging Markets index EEM, -1.21% — have surged 81%. Oil futures have doubled from their February lows.

The market is focused on emerging markets leading the world out of recession now, which is not helping the dollar, said Richard Batty, global investment strategist at Standard Life Investments, which manages about $200 billion in assets.

Here are five ways to take advantage of further drops in the U.S. dollar:

1. Currencies. Exchange-traded funds from Rydex Investments, WisdomTree Investments, Invesco PowerShares and others provide direct exposure to foreign currencies relative to the U.S. dollar. See related story on currency ETFs.

Interest in currencies has increased over the past year after asset classes that were supposed to perform independently, such as stocks, corporate bonds and real estate, crashed together, said Anthony Welch, a portfolio manager at Sarasota Capital Strategies, a wealth manager in Florida.

With foreign exchange trading, It’s always one currency versus another. There’s always something going up, said Welch, who helped start The Currency Fund FOREX in May to capitalize on this burgeoning interest.

Other mutual funds focused on currencies include Franklin Templeton Hard Currency Fund ICPHX, -0.85% Merk Hard Currency Fund MERKX, -0.85% and Rydex Weakening Dollar 2X Strategy Fund. RYWDX, -1.90%