Unwinding the Short-Squeeze on the Dollar

According to data reported by the Commodity Futures Trading Commission, investors have been closing bearish bets on the U.S. dollar, which may have been working to drive the dollar higher in recent weeks, reports Bloomberg. The U.S. dollar had declined sharply against other currencies in recent months until rallying back in May. The dollar index has declined from a high of near $82 in December to an all-time low of near $72.60 at the beginning of May. Economic commentator Jim Rogers--a noted dollar bear--had predicted that the dollar would rally, as it had entered over-sold status. However, the dollar has resumed its decline in recent days, falling below the $75 range. Has the dollar bear-market resumed? Or is this a minor hiccup in a new, long-term dollar rally? Investors looking to play continued dollar weakness might consider SPDR Gold Trust GLD or PowerShares DB USD Bearish Index UDN. UDN and GLD may do well if the dollar is in a bear-market. Investors believing that the dollar will resume its rise might consider PowerShares DB USD Bullish Index UUP. UUP may do well if the dollar is appreciating against other currencies.