Strong Dollar, Buy the UUP

U.S. Dollar and Euro (Currency)

World investors have been buying the Dollar and one way to piggy-back on their efforts is going long on the PowerShares DB US Dollar Index Bullish (NYSE:UUP).

In 2010 the UUP is up 2.4% and since mid-January the ETF is up 4.4% as investors have been buying up both the UUP and the dollar.  The UUP is a slow mover, over the past 52 weeks the ETF has only ranged from $22 to $26.  So why go long the dollar?

(CNNMoney.com) What's moving the market: Prices drifted lower as investors focused on a stronger dollar amid a lack of market-moving economic news.

The dollar index (DXY), which measures the greenback against a basket of other currencies, was up 0.3% to 80.66. A stronger dollar typically weighs on prices for commodities that are priced in the U.S. currency.

uupBut losses were tempered by an advance on Wall Street, where stocks pushed higher.

Many oil traders view the stock market as a leading indicator of economic activity. As a result, oil prices often rise in tandem with the major stock indexes.

"The stronger dollar is trying to pull the market down and the stock market is trying to pull it up," said James Cordier, president of Liberty Trading Group. "I think most people are waiting for the supply numbers."

The American Petroleum Institute will release its weekly report on U.S. supplies of crude oil later Tuesday.

 

WATCH RELATED VIDEO>>
From last week on the Nightly Business Report -- As investors waited to hear how serious Greece was going to be about tackling its financial problems, over the past several weeks they've been buying U.S. dollars, sending the greenback to its highest level since last summer. Tonight's "Street Critique" guest thinks the dollar will continue to strengthen. He's Win Thin, senior currency strategist at Brown Brothers Harriman joining us tonight from the NASDAQ. Win, welcome back to NIGHTLY BUSINESS REPORT. WATCH RELATED VIDEO>>

 

WallStNation.comThanks for visiting WallStNation.com, to assist your investing research try using our Search (click to access) or review the list of Tickers (click to access) that link directly to articles related to the given stock/security.

To Browse our Most Recent Stories (click here)


Share WallStNation.com Content

Share this article with others, WallStNation.com is the Independent Wall Street Newspaper. Thanks for Reading!

Daily Market Summary




Please Review the WallStNation.com Disclaimer and remember that information provided by our site is at the investor's sole financial risk. Please Review for more Details