ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Core Equity Channel
  2. Here’s Why Some Are Skeptical Of The US Dollar ETF
Core Equity Channel
Share

Here's Why Some Are Skeptical Of The US Dollar ETF

Aaron NeuwirthAug 15, 2019
2019-08-15

The US dollar has been solid this year, perhaps too strong for some investors’ liking as highlighted by an almost 4% year-to-date gain for the Invesco DB US Dollar Index Bullish Fund (UUP B). However, UUP’s strength isn’t luring currency traders to the greenback.

UUP, the largest ETF dedicated to tracking the dollar’s move against major currencies, seeks to establish long positions in ICE U.S. Dollar Index futures contracts with a view to tracking the changes, whether positive or negative, in the level of the Deutsche Bank Long USD Currency Portfolio Index — Excess ReturnTM over time, plus the excess, if any, of the sum of the fund’s Treasury Income, Money Market Income and T-Bill ETF Income over the expenses of the fund. The fund invests in futures contracts in an attempt to track its index. The index is calculated to reflect the changes in market value over time, whether positive or negative, of long positions in DX Contracts.

“The bullish greenback tracker has been trending steadily higher all year long, boosted by the double-barreled support of its 80-day and 160-day moving averages,” according to Schaeffer’s Investment Research. “Previously, this trendline pair had acted as resistance to guide UUP lower during its lengthy decline off that January 2017 high — a long-term slump that ultimately persisted well into the second quarter of calendar year 2018.”

Timing Is Everything for U.S. Dollar

Dollar strength comes even as the Federal Reserve has alluded to more rate cuts later this year after the central bank dropped borrowing costs by 25 basis points last month.

While the expectation was that the dollar would weaken this year, there have been plenty of catalysts to boost the greenback. As has been seen in the past, the strong dollar can be a headwind for investors. Still, data indicate traders aren’t betting on more upside for UUP.

Relative: Currency ETFs Reflect Fallout of Escalating Trade War

“Meanwhile, traders have reacted coolly to the rise of the bullish dollar play, with etf.com reporting net outflows of $83.18 million for UUP since mid-April — right around the time the fund was finally putting some real distance between itself and former resistance at $26. For a fund with assets under management (AUM) of $307.14 million, that’s a non-trivial amount of capital yanked from UUP simultaneous with its rally gaining wheels,” according to Schaeffer’s.

For more market trends, visit ETFdb.com.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X