Optimistic U.S. employment data and another hit to Europe’s financial problems have pushed investors to U.S. assets and exchange traded funds (ETFs).
Despite an increasing U.S. trade deficit, the U.S. dollar has appreciated against most major counterparts, as projections on U.S. job data look rather favorable, report Candice Zachariahs and Ron Harui for Bloomberg. The U.S. dollar index, which compares the dollar against a basket of six major currencies, increased 0.71% late Thursday. [ETFs Make Gains as Oil Prices Cool.]
Credit ratings agency Moody’s lowered Spain’s sovereign debt rating on March 10th over concerns of the country’s banking sector, government debt and sluggish economic performance. The ratings agency warns of further potential downgrades in the future, according to Yahoo! Finance. Investors are particularly worried that there won’t be enough money to bail Spain out if the situation required it.
The U.S. dollar has been suppressed for most of the year because other countries, including the European Central Bank, are more likely to raise rates before the U.S. Central Bank – countries with higher rates experience higher demand for their currency.
PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP) is close to going above its 50-day average and the 200-day is not far away.