The U.S. dollar plunged Wednesday, with a greenback-related exchange traded fund dipping below its long-term trend line, as the worsening economic outlook and ongoing volatility added to skepticism that the Federal Reserve would pull the trigger on another rate hike anytime soon.

The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) fell 2.0% Wednesday, dropping below its 200-day simple moving average. UUP tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.

Meanwhile, the PowerShares DB US Dollar Index Bearish Fund (NYSEArca: UDN), which takes the inverse or short performance of the U.S. dollar against the same basket of six major currencies as UUP, gained 2.0%.

The Dollar Index, which tracks a basket of developed market currencies, declined 1.9% to 96.96.

On Wednesday, the U.S. dollar slipped to its lowest level against the euro since last October and erased most of its gains against the Japanese yen over the past few weeks, reports Sam Forgione for Reuters.

The CurrencyShares Japanese Yen Trust (NYSEArca: FXY) rose 2.4% Wednesday while the CurrencyShares Euro Currency Trust (NYSEArca: FXE) gained 2.0%. FXE is also now testing its 200-day simple moving average.

The U.S. dollar weakened against foreign currencies after William Dudley, president of the Federal Reserve Bank of New York, said that financial conditions have tightened in the past few weeks since the Fed hiked interest rates.

Showing Page 1 of 2