Spike in U.S. Dollar as Fed-Speak Clouds QE (UUP) (FXE)

July 17, 2012 11:44 AM EDT
U.S. dollar index is paring losses for the week and heading back toward recent highs near 84. The latest rally in prices is directly tied to comments from Ben Bernanke, which some say points to a 'kick the can' attitude on potential QE3 in the U.S.

If the U.S. stands pat on easing, the U.S. dollar is seen strengthening compared to other currencies, at least in the short term. The dollar is also benefiting due to its safe-haven status, as the U.S. remains a relatively stable place to invest. U.S. bonds have performed extremely well when compared to overseas markets. As long as investors see this trend continuing, the U.S. dollar will likely move higher.

PowerShares DB US Dollar Index Bullish (NYSE: UUP) is higher by 3 percent this year, with half of that gain coming in the past month.

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