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This article was originally published on ETFTrends.com.
A publicly traded fund connected to the US dollar continued to weaken on Friday, with a sloping at least seven months.
Invesco DB’s Haussier index in US dollars (NYSEArca: UUP) fell 0.4%. Meanwhile, the index (DXY), which tracks the opposite USD to a pair basket, fell 0.3% to $99.3970, rising at its weakest point since January 7 and suffering its fourth consecutive weekly loss.
The US dollar has depreciated more than 8% since its March peak, when shelter investors piled up on the dollar at the height of the global market due to the coronavirus outbreak, Bloomberg reports. Looking ahead, some strategists warn of an outstretched era of weakness in the US currency.
Investors have reduced their exposure to the USD due to genuine negative rates in the United States, the Fed’s accommodative policy on the U.S. economy, and massive U.S. government stimulus measures that have flooded the market with liquidity. Moreover, emerging tensions between Washington and Beijing, the resurgence of Covid-19 infections in the United States, and rising unemployment demands are also affecting the dollar.
“In the medium term, the concept that the dollar is in the early stages of global change abounds,” Alan Ruskin, Deutsche Bank AG’s leading foreign strattist, told Bloomberg Alan Ruskin. “The scope of change will be determined” in component through the number of easing iterations that the Fed will have to pass to gain ground.
The dollar was also under pressure this week after the euro currency strengthened from the European Union’s landmark deal for a 750-billion-euro, or $871 billion, economic recovery fund.
In addition, many investors are turning to the Japanese yen, the classic refuge value, as a defensive game in reaction to any sudden increase in global volatility. The yen’s currency also rose in front of all its primary peers on Friday.
To learn more about currency markets, our currency ETF category.
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