Dollar Bulls Don't Have Much to Cheer About

The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) is off 2.1% year-to-date and perhaps making matters more concerning for the greenback is that UUP is lower by more than 1% since the Federal Reserve unveiled its first interest rate hike of 2017 last week.

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. Other currencies, including the Australian dollar, yen and Canadian dollar have recently been gaining momentum against the greenback.

Eurozone political volatility, Brexit aftermath and Japan’s overt efforts to weaken the yen indicate the dollar should remain strong against the euro, pound and yen. However, safe-haven bets could spur the yen higher against the dollar, if only for a short while.

“Four months after the dawn of the Trump trade, currency investors worldwide are capitulating.