A rally for the Dollar? (UUP)

The PowerShares DB US Dollar Index Bullish (Public, NYSE:UUP) is down to a 52 week low, but it looks like a rally is formulating. Here's the news:

The dollar rallied from 14-month lows versus the euro on Monday, as riskier assets such as U.S. stocks and commodities fell, prompting investors to lock in recent gains in other currencies.

Analysts also said investors felt uncomfortable pushing the euro higher given the huge amount of bearish trades on the dollar, which suggests a near-term recovery in the U.S. currency is on the horizon.

"Most major currencies including the euro are running out of steam. Specifically, the euro's earlier rally wasn't really supported by data as we saw the German consumer confidence was actually weaker," said Kathy Lien, director of FX research at GFT in New York.

Figures earlier on Monday revealed German consumer sentiment unexpectedly declined for the first time in just over a year going into November. For more see [ID:nLN478719].

The euro fell to session lows at $1.4951 EUR=EBS on the EBS platform after hitting a 14-month high at $1.5064 earlier. By midday, it was at $1.4957, down 0.3 percent on the day.

The ICE Futures dollar index .DXY, a gauge of the greenback's performance against six other major currencies, was up 0.28 percent at 75.682.

It was a complete turn of events for the dollar, which struggled earlier, especially in the wake of a report saying China should increase its holdings of euros and yen in its foreign reserves.

Source: http://www.reuters.com/article/usDollarRpt/idUSN2642997620091026