Real World (Real-Time) Problem on Currency Forwards, Interest Rate Parity, and Derivatives

Hi Guys,
 
Since we are diving into the CFA Level III exam material, just thought I would open up for discussion this real world (and real-time) problem that is something of a paradox to me. I figured I’d rather have this discussion with you guys than others in the office who have no clue about this topic (including my boss). This is on the topic of currency forwards, interest rate parity, and derivatives:
 
A few minutes ago, a portfolio manager from Wisdom Tree came on TV to talk about a new fund that he is launching. The fund is a Hedged European Small-Cap Equity ETF. Specifically, he told the CNBC news anchor that he uses currency forwards to hedge out his EUR/USD currency exposure and with the interest rate environment right now, investor are “being paid to hedge using currency forwards.”
 
This comment really struck me and I want to evaluate its validity given the facts that I know (please feel free to correct me or fill me in on anything that I have missed):
 
- Currently, the EUR is doing down against the USD (in fact, the EUR has been trajecting in a downward spiral)
 
- Thanks to the actions of the ECB (that Mario guy), we witness the rare and unique phenomenon of NEGATIVE interest rates (real) throughout much of Europe (in fact, Gary Cohn of Goldman Sachs just came out and stated his concern about this phenomenon this morning)
 
- Interest rates are predicted to rise in the U.S. and the market is pricing this in as I type. In fact, Jan Hatzius of Goldman Sachs (their Chief Econ guy) has recently predicted a rate-rise scenario of “sooner and swifter” in the U.S.
 
- European asset prices are moving up yet the Euro is moving down against the dollar, so when converted into USD, your European investment does not make much money in dollar terms.
 
- Given the interest rate environments in the U.S. and Europe, the Euro should trade at a forward PREMIUM versus the dollar (http://www.investopedia.com/articles/forex/08/interes-rate-parity.asp), correct? So in other words, all else held constant, Euros will convert into MORE dollars in the future (forward rate) as oppose to now (spot rate).
 
- But isn’t this going against what the currency market is currently predicting? After all, folks are talking about the EUR furter weakening against the USD and how much CHEAPER it would be for people from the U.S. to travel to Europe, buy European imports in the U.S. (goods imported INTO the U.S.).
 
- Furthermore, economically, this would generate additional sales for European EXPORTERs e.g. BMW, Mercedez-Benz, German makers of machinery.
 
Given the above facts, how are you being PAID to hedge as an investor of a Hedged European Small-Cap Equity ETF? Is the Wisdom Tree guy wrong? I absolutely agree with his strategy of capturing the equity return of the European companies while hedging out the currency risk. But again, how are you being PAID to hedge when the currency market is killing the EUR?