US Dollar Index Rose by 1% on a Strong Data Release
Why US Markets Remain Cautious Even after a Strong Data Release
US dollar index rose by 1%
The US Dollar Index, which measures the strength of the dollar against the other major currencies, rose by close to 1% at 1:00 PM EST. The Dollar Index rose to a high of 98.24 after the GDP release.
The US Market traded on a cautious note as the strong GDP could add to the uncertainty surrounding the rate hike. A stronger-than-expected GDP and consumer sentiment could increase the expectations of a rate hike in March. This was a major reason why the Market failed to sustain its initial peak after the GDP release.
How did the major stock indexes react?
The US Market opened with a decline after the initial uptick on February 26, 2016, as the S&P 500 Futures Index was trading nearly flat, with a slight rise of 0.15% at 1:30 PM EST. NASDAQ futures had a slight increase of 0.28%, and the Dow Jones Industrial Average also traded nearly flat with a slight rise of 0.10%.
Crude oil prices also headed up as the dollar rose, with crude oil futures increasing by 0.82%. The S&P Volatility Index also saw a strong increase of ~2.3%.
Impact on the major ETFs
Looking at the performance of the major ETFs, the SPDR S&P 500 ETF (SPY) rose by 0.16% on February 26, 2016, at 1:30 PM EST after the strong GDP data release. The SPDR Dow Jones Industrial Average ETF (DIA) rose by 0.07%.
Among the currency-related ETFs, the WisdomTree Bloomberg US Dollar Bullish ETF (USDU) and the PowerShares DB US Dollar Bullish ETF (UUP) traded on a strong note as they rose by 0.86% and 0.77%, respectively.
While the crude oil–related United States Oil ETF (USO) increased by 0.68%, the ProShares Ultra Bloomberg Crude Oil ETF (UCO) rose by 1.6% around lunchtime on February 26, 2016.
In the second part of this series, we will take an in-depth look at the GDP release and how the various sectors reacted to the data release.
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