When the Dollar Bottoms, Enter the UUP
The PowerShares DB U.S. Dollar Index Bullish (NYSE:UUP) is a very slow mover, but its an efficent way to bank a decent return when the U.S. dollar begins its comeback, the question is -- when to play it?
Over the past 12 months PowerShares DB US Dollar Index Bullish (UUP) shares have traded between $21.91 and its 52-week high of $25.84. Today the UUP is trading at $22.28 today, up 0.45% or 10 cents and volume is currently at 2.9 million shares traded.
WHERE IS THE DOLLAR HEADED?
That opinion weighs more on what the rest of the world believes, specifically the G20, and they are concerned to say the least.
The dollar has more room to fall and if anything, take notice that if you are thinking of buying into the UUP, it appears to be near the bottom.
Via the AFP:
BRUSSELS — Europe added its voice Monday to a growing chorus of criticism of the US Federal Reserve's decision to print billions of new dollars to shore up the nation's fragile economy.
In an unusually sharp rebuke of US monetary policy, delivered on the eve of the much-awaited G20 summit, Jean-Claude Juncker, head of the group of eurozone finance ministers, said the dollar was undervalued and the Fed stimulus threatened "risks" for the world at large.
"The dollar in relation to the euro is not at the level it should be," Juncker said at a hearing before a European parliamentary committee.
Following in the footsteps of Brazil, China, Germany and South Africa, Juncker slammed Washington for a "selfish" stance and double standards.
Currency rates "should first and foremost reflect economic fundamentals," he said, "not give rise to national stands that are more inspired by selfish reflexes than by the notion that the international community should confront global concerns."
US central bank plans announced last week to inject another 600 billion dollars (422.5 billion euros) into the economy "don't appear to respond to the expectations we could have had," Juncker said.
"I see more risks and more possibilities of skidding offcourse globally in the decisions taken by the Fed," he added.
Through a process known as quantitative easing, the Fed will buy up US Treasury securities and other assets, hoping to get more cash into the hands of companies and consumers by making long-term borrowing cheaper.