Dollar Gains in Flight to Safety (UUP)

The dollar gained against most major currencies Friday, as investors sold equities and commodities and bought the dollar and U.S. Treasuries. The PowerShares US Dollar Index UUP closed up 0.7%, to $24.13. European Central Bank Governing Council member Axel Weber told Bloomberg news that it would be "wise" to extend unlimited liquidity to banks past the end of 2010, according to a Reuters report. The Euro dropped to a 5-week low against the dollar, at $1.266. Market anxiety about the strength of the economic recovery in the United States has strengthened in recent days. Economic reports have shown minimal growth in employment and domestic output. "The U.S. economic data has been sub-par and ominous," Jessica Hoversen, fixed income and currency analyst at MF Global in Chicago told Reuters. "There's a growing concern that Europe and other developed countries will follow in the U.S.' footsteps." "You really do feel the tension in the markets. Everything looks to be on support levels," she noted. Sacha Tihanyi, currency strategist at Scotia Capital in Toronto, expressed doubt about Europe's recovery to Reuters. Weber's comments "simply confirm what many already expect from the ECB, that the aggregate economy (despite recent solid performance from Germany) is not yet prepared to be taken off of monetary policy life support," she said.