A currency exchange traded fund based on the U.S. dollar fell on Wednesday and was in danger of setting a new all-time low as most rivals advanced against the greenback.
PowerShares U.S. Dollar Index Bullish (NYSEArca: UUP) was down fractionally but pared its losses in late-morning trade. Producer prices rose more than expected in July, according to government figures released Wednesday. Excluding food and energy, core PPI rose 0.4%, the largest monthly rise since January, MarketWatch reported. Stocks advanced as the Dow gained nearly 100 points.
The ETF tracks the dollar’s movements against a weighed currency basket consisting of the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. [Swiss Franc ETF Higher; No Euro Peg from SNB]
The dollar ETF is down 7.5% year to date, according to investment researcher Morningstar. “For those who are bullish on the greenback, using a fund that bets against six currencies relative to the dollar is perhaps a better approach than taking on the idiosyncratic risk of just one currency,” the firm writes in a profile of the ETF.
Although the fund has been beaten up this year, recent data suggests traders are scaling back their bearish bets against the dollar and the ETF. [Traders Lighten Wagers Against Dollar]
PowerShares U.S. Dollar Index Bullish
Chart source: StockCharts.com.
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