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Dollar ETF (USDU) Hits New 52-Week High

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For investors seeking momentum, WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU - Free Report) is probably on radar. The fund just hit a 52-week high and is up 15% from its 52-week low price of $25.42/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

USDU in Focus

WisdomTree Bloomberg U.S. Dollar Bullish Fund offers exposure to the U.S. dollar against a basket of foreign currencies by tracking the Bloomberg Dollar Total Return Index. It exhibits strong negative correlations to international equity and bond portfolios. WisdomTree Bloomberg U.S. Dollar Bullish Fund charges 50 bps in annual fees (see: all the Currency ETFs here).

Why the Move?

The U.S. currency has been an area to watch lately, given rising fears of a global recession and Fed’s aggressive rate hike bets. Jerome Powell recently said that the Fed would need to keep interest rates high enough to slow the economy “for some time” in order to curb high inflation. Additionally, the latest bouts of data bolstered the case for rate hikes. The economy added 315,000 jobs in August, while the unemployment rate ticked up to 3.7% from 3.5%. Meanwhile, service activity picked up in August for the second straight month, indicating that the economy is not in recession and could able to manage rate hikes.

More Gains Ahead?

Currently, USDU might remain strong given its weighted alpha of 15.10 and 20-day volatility of 7.41%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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