Douglas Davenport: Global trade has an enormous influence on the financial markets and worldwide economy. So when the currency that serves as the guidepost for valuing assets drops 1 percent, all investors are affected. That’s exactly what happened to the U.S. dollar last Thursday.
The PowerShares DB US Dollar Index Bullish Fund (NYSEARCA:UUP), which compares the greenback against a basket of major currencies, posted the fourth-biggest decline in a year after the announcement of the debt deal in Washington. International investors soured on America’s ability to pay its bills.
UUP also was turned back at a logical point of resistance (please see below the red line in the chart), which provided further support for investors hoping for a weak dollar.
The Federal Reserve watches the impact of the dollar’s value on emerging economies. An economic warning from China not only increased the odds of additional Chinese stimulus, but it also raised the odds that the central bank will push off tapering its massive $85-billion-a-month bond-buying program.
Stock investors seem to think so. From Reuters:(...)Click here to continue reading the original ETFDailyNews.com article: A Weaker Dollar Will Continue To Boost This ETFYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)