Despite the country’s slow growth, the U.S. is still outperforming other major economies, bolstering a gauge of the dollar to its highest level in over a month and lifting dollar-related exchange traded funds.
The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) was up 0.2 Friday. The ETF is currently trading at its highest level since February and is up 0.3% year-to-date. [ECB Expectations Bolster Dollar ETFs’ Appeal]
The Bloomberg Dollar Spot Index, which follows the U.S. currency against 10 major counterparts, is in its second weekly gain and touched its highest level since June 18, Bloomberg reports.
“The U.S. dollar continues to be doing a little bit better compared to other currencies,” Sireen Harajli, a strategist at Mizuho Bank Ltd., said in the Bloomberg article. That’s “mainly because despite the slight weakness in U.S. data, it’s still outperforms what’s going on in Europe.”
The greenback is at a eight-month high against the Eurozone currency, Reuters reports. [Diverging Fed, ECB Policies Pressure Euro ETFs]
“U.S. data has been good or better than expected, whereas European data continues to point to a slowdown,” Boris Schlossberg, managing director in FX strategy at BK Asset Management, said in the Reuters article.
Specifically, the dollar is holding its ground as demand for U.S. durable goods rose 0.7% against median forecasts of 0.5%. Additionally, the U.S. economy is expected to expand 1.7% this year, whereas Eurozone countries are estimated to grow 1%.
Additionally, due to the euro bloc’s proximity to the ongoing conflict in Ukraine, there is also a slight volatility concern.