Speculative operators have increased their pessimism regarding the dollar, reaching levels not seen since last September. Despite the recovery in equity markets, concerns about U.S. assets continue to circulate.
Data published by the Commodity Futures Trading Commission (CFTC) reveals that hedge funds, asset managers, and other speculators raised their bets against the dollar during the week ending Tuesday, April 29. Collectively, they hold a position of approximately 17 billion dollars regarding the weakening of the currency.
The Bloomberg Dollar Spot Index decreased by 0.4 percent on Friday, marking its fourth consecutive week of declines in the last five. President Donald Trump’s trade policies have contributed to undermining the dollar's perception as a safe haven, prompting traders to bet against it and divert funds from U.S. assets.
Although some markets have recovered in recent days due to signs of trade deals and economic strength, the trend to "sell America" persists. The dollar has fallen more than 6 percent so far this year, and further losses are expected following the upcoming Federal Reserve decision on interest rates on May 7.
The one-week and one-month put options on the Bloomberg Dollar Spot Index reflect expectations of weakness for the dollar before and after the Fed meeting. Despite stronger-than-expected employment data on Friday, traders have redirected funds out of the United States amid signs of opening tariff negotiations by China.
The Australian and New Zealand dollars were highlighted for their strong performance among the G10 currencies, registering gains of around 1 percent. Aroop Chatterjee, managing director of strategy at Wells Fargo in New York, noted that the market shows some optimism regarding news about China, observing a trend of reducing long positions in dollars against Asian currencies.
