To every action there is an equal and opposite reaction. Newton's third law of motion has proven itself once again as the U.S. dollar, and related ETFs, is negatively affected by robust government spending policies.
The U.S. dollar has depreciated against each of the 16 most-active currencies since March 5 as investors worried over the nation’s ability to fund the budget deficit, reports Candice Zachariahs for Bloomberg. Investors are turning to cyclical currencies with strong balance sheets, such as the Norwegian Krone and Canadian dollar.
Treasury yields in between the 2- and 10-year notes increased to a record 2.793%, reflecting investors’ demand for higher premiums on longer government loans and the possibility of inflation eating away returns. (more)