Strong Dollar, Buy the UUP
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.
But 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.
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