Hedge Funds and Asset Managers Turn Bearish on US Dollar

According to Odaily, the latest data from the U.S. Commodity Futures Trading Commission (CFTC) reveals that hedge funds, asset management companies, and other participants in the futures market have adopted a bearish stance on the U.S. dollar as of the week ending August 27. This marks the first time since February that these entities have held net short positions on the dollar, a period when traders prematurely anticipated approximately six rate cuts in 2024. The dollar experienced a 1.6% decline in August, the largest monthly drop this year. Traders have been driving down the dollar and U.S. Treasury yields in anticipation of at least a 25 basis point rate cut by the Federal Reserve in September. However, this time, Federal Reserve officials have clearly indicated their intention to begin cutting rates for the first time since 2020. Swap traders are now pricing in a full percentage point rate cut by the Federal Reserve this year.