“Along with growth, both inflation and inflation expectations are moderating. Five-year inflation expectations–derived from the TIPS market–peaked in May at over 2%. Today they are a bit above 1.60%. As inflationary pressures moderate and expectations come down, the Federal Reserve has begun to signal a (potentially) more measured pace to future interest rate hikes, removing one of the key tailwinds for the dollar,” according to BlackRock.

Traders who are considering a bearish position on the dollar can capitalize on the further weakness through an inverse USD strategy, the Invesco DB US Dollar Index Bearish (NYSEArca: UDN).

Investors have pulled $127.09 million from UUP to start 2019.

For more information on the USD, visit our U.S. dollar category.