The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP), the tracking exchange traded fund for the U.S. Dollar Index, is down more than 8% this year, cementing its status as one of the worst-performing developed market currency ETFs. Add to that, currency traders remain bearish on the greenback.
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.
“ANZ’s weekly report, citing information from the US Commodity Futures Trading Commission (CFTC), shows that leveraged funds reduced their net positions in the USD by a further $US2 billion last week,” reports Business Insider. “That marks the ninth straight week of net selling, as the US dollar index fell below 94 on Friday for the first time since April 2016.”
Despite persistent media headlines to the contrary, the currency backdrop has been more nuanced since early 2016. Indeed, the U.S. dollar, as measured by the Bloomberg Dollar Index, traded in negative territory from mid-February through mid-November 2016, not reaching positive territory until after the November US elections.