Geithner Pimps the Dollar; UUP to Benefit

Tim Geithner has been on a mission pimping the U.S. dollar: its staying power, the world's reserve currency, how the U.S. is committed to a 'strong dollar', blah, blah, blah.

Say the powers-that-be can get the dollar on the comeback trail; then there's no better bet to play than the PowerShares DB US Dollar Index Bullish (NYSE:UUP) which is trading just $1.50 above its 52-week low.

BOTTOM LINE

The U.S. dollar may stand to gain strength more on the weakness in equities than the apparent strength in the economic data.

Que the UUP which has taken a beating in the past few months, but not that bad considering most equities. The UUP has dropped 8.3% since late April, after it peaked at in the $26 range; yesterday, UUP shares were down 1% at $23.62

BIG PIMPIN' THE DOLLAR

Policies in the U.S. have been crafted with an eye toward keeping the U.S. dollar strong, U.S. Treasury Secretary Timothy Geithner said Tuesday during an event in Jeddah.

"Policies of the United States are designed to lay the conditions for a strong dollar," he said.

"We are very committed ... to making sure that as we get through the crisis, we bring down fiscal deficits and we reverse these extraordinary interventions we've taken," the secretary added.

Geithner made the comments in a question-and-answer session held after delivering a key speech on the global economy and ties between the U.S. and the Gulf region.

Geithner also said he sees durable signs of stabilization in the economy but nations need to continue to work at stemming the crisis.

Check out the UUP for a less volatile investment; it's a big dog and it moves slowly along with the changes in the dollar. Just take a gander at the past few months on your favorite charting websites.

Disclaimer: No positions in the UUP.

Comments

[basehitz:]

"Policies of the United States are designed to lay the conditions for a strong dollar," he said.

Thanks for the comic relief. USD inverse to markets is trade I'm watching in order to buy commodities if this works. Strong dollar policies my ass.

Jul 16 08:10 AM