US Dollar falls to a 2-week low

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April 12, 2019 5:17pm NYSE:UUP

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From Aaron Hankin: The U.S. dollar on Friday fell to its lowest level since late March, and was set to snap a string of consecutive winning weeks.

The ICE Dollar Index DXY, -0.22% a measure of the greenback’s strength against six of its closest trading rivals, was down 0.2% to 96.969. The index hit an intraday low at 96.75, its lowest level since March 28 and is set for its first weekly loss since the week ending March 12, according to data from FactSet.

“The dollar index has surrendered much of its gains and is now trading below the 97 mark, even as the latest U.S. producers price index exceeded market expectations, while jobless claims surprisingly fell to their lowest levels since 1969,” wrote Lukman Otunuga, research analyst at FXTM.

“Coupled with the March U.S. inflation data released earlier this week, the data underscores the central bank’s ‘patience’ on U.S. interest rates, and this may remain unchanged for the rest of 2019,” he said.

The euro EURUSD, +0.4176%  was the big winner from the broad-based dollar weakness, trading through the psychological level at $1.13. The common currency was most recently changing hands at $1.1301, compared with $1.1254.

The Japanese yen USDJPY, +0.31% meanwhile, was trading at its lowest level versus the buck since March 5.

Selling pressure on the yen, considered a haven currency, came as U.S. equity markets rose Friday in New York. The Dow Jones Industrial AverageDJIA, +1.03%  rose more than 200 points, the S&P 500 SPX, +0.66% gained 0.6% and the Nasdaq Composite COMP, +0.46% rose 0.4%.

“Today’s strong follow-through up-move could further be attributed to some technical buying, especially after yesterday’s sustained move back above the very important 200-day SMA [simple moving average] around mid-111.00s. Hence, a follow-through up-move, back towards March swing highs near the 112.15 region, now looks a distinct possibility,” wrote currency analysts at FX Street.

A moving average is a closely watched momentum indicator.

A single dollar last fetched ¥112.03 versus ¥111.66 on Thursday.

On the data front, U.S. import prices rose for the second straight month in March and the University of Michigan said its consumer sentiment index fell to 96.9 in April. Economists polled by MarketWatch had expected a reading of 97.5.

The Invesco DB US Dollar Index Bullish Fund (UUP) was unchanged in after-hours trading Friday. Year-to-date, UUP has gained 8.03%, versus a 9.17% rise in the benchmark S&P 500 index during the same period.

UUP currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 17 ETFs in the Currency ETFs category.

This article is brought to you courtesy of MarketWatch.

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