U.S. Dollar Touches A Five-Month Low Versus Euro (UUP)
The U.S. Dollar fell for a fifth straight day on Monday, although the greenback has been strengthening a little in afternoon trade, with the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP) making it back to positive territory, up 0.05% to $21.78. Investors are anticipating near-term potential rate hikes coming out of policy meetings this week.
The European Central Bank, the Bank of England, and the Reserve Bank of Australia will all be meeting this week. In earlier trading, the EUR/USD pair touched $1.4268, the highest level since early November. According to currency strategists at Citigroup, the foreign exchange market is currently pricing in two ECB rate hikes by June, which is lending the strong bid to the Euro.
The analysts, however, believe that the ECB will hike rates this week and then keep any additional hikes on hold for the entire second quarter. “The prospect for less aggressive hikes in the near term could prove disappointing for some market participants,” they wrote.
