The Federal Open Market Committee (FOMC) meets today and that could result in more pain for the already downtrodden U.S. dollar and related ETFs, such as the PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP), the tracking exchange traded fund for the U.S. Dollar Index.
Investors will wait for comments from the Fed later today for clues about the future of interest-rate policy.
UUP is one of this year’s worst-performing major currency ETFs. 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.
“The most important feature of the meeting will not be so much how the Federal Reserve plans to unwind its massive balance sheet, as that is widely expected from the Federal Open Market Committee, but the guidance Fed Chair Janet Yellen and the central bank can give about its plan for the federal funds rate,” reports CNBC.