Long-term dollar reserve currency erosion from de-dollarization efforts by China, Russia, and BRICS nations reducing structural demand
Persistent U.S. twin deficits (fiscal deficit 6%+ of GDP, current account deficit 3%+ of GDP) creating long-term dollar headwinds
Federal Reserve policy normalization lag versus other central banks, particularly if ECB/BOJ tighten while Fed pauses or cuts
Futures roll costs during sustained contango periods can erode 1-2% annually from spot dollar performance
Alternative dollar ETFs with lower expense ratios (UUP's 0.77% vs competitors at 0.50%) eroding market share
Direct currency futures trading by sophisticated investors bypassing ETF structure and fees
Multi-currency ETFs or hedged equity strategies reducing demand for pure dollar exposure vehicles
Counterparty risk from futures clearing members and swap agreements, though mitigated by daily mark-to-market
Liquidity risk during extreme currency volatility when bid-ask spreads widen beyond normal 2-3bp levels
Tracking error risk from imperfect futures replication and timing of monthly contract rolls
StructuralCompetitiveBalance Sheet
