Currency Funds Rose in February on Rallying Dollar, Parker Says
Foreign-exchange funds gained 0.48 percent in February as a rallying dollar led gains, according to Parker Global Strategies LLC.
Among the 41 funds that reported results, the performance ranged from a return of 6.96 percent to a loss of 2.11 percent, the company said today in a news release. Among the funds, 20 gained and 21 reported a loss. The company’s index is down 0.74 percent for the past 12 months.
The threat of U.S. government spending reductions, known as sequestration, proved no barrier to investors snapping up American assets, Stamford, Connecticut-based Parker said. Home sales, consumer confidence and employment improved, overshadowing the impact of cuts predicted to gnaw 0.6 percent from growth in the world’s biggest economy this year.
“Bullish financial markets persisted as investors’ risk appetites strengthened,” according to the statement. “The upcoming U.S. spending cuts had little effect on the dollar’s rally, which was supported by positive economic data.”
Consumer confidence had the biggest gain in February since November 2011. Purchases of new homes jumped in January to the highest level in more than four years, while homebuilders began work on the most homes since July 2008.
The dollar gained versus 14 of its 16 major peers in February, while the euro fell against 14 major counterparts. The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six U.S. trade partners, climbed 3.5 percent last month.
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