“What could change the course for the dollar is if the Federal Reserve ratchets up its forecast for interest rate increases,” according to CNBC. “The central bank currently expects to hike three times, but some Wall Street economists are now expecting four because of the tax cuts and improved growth. They say the Fed could revise its forecast after its March meeting.”
Although the dollar and UUP have struggled against the backdrop of two interest rate hikes by the Federal Reserve, some currency market observers see potential for the greenback to rally in the second half of 2017. The rising euro has also been a problem for the dollar, but some market observers believe the common currency is set to pullback.
Traders considering a bearish position on the dollar can consider the PowerShares DB US Dollar Index Bearish (NYSEArca: UDN), an inverse though not leveraged bet against the greenback.
For more information on the USD, visit our U.S. dollar category.