Dollar bulls decline as the US economy slows Exchange rate | Inflation in the United States

Although leveraged funds continued to maintain their bullish bets on the dollar last week, they were overshadowed by the increase in asset managers' net dollar short positions, according to data from the Federal Reserve. Commodity Futures Trading Commission.

Together, they maintained a net short position in contracts worth US$5.36 billion as of May 21. This figure contrasts with the net long position of US$2.02 billion in the previous week.

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During this period, US monthly inflation data calmed for the first time in six months, while retail sales stagnated in April, raising the prospect of an interest rate cut by the Federal Reserve. Investors will now turn their attention to personal consumption expenditures due on Friday – the company's preferred measure of inflation. Federal Reserve– Looks for any sign that the central bank will begin to ease its policy.

The bullish sentiment towards the dollar is fleeting.

“Positions will be volatile in the short term, depending on economic data published in the United States.“, He said Carol Kongcurrency strategist Commonwealth Bank of Australia. “But I think markets will eventually become more bearish on the US dollar as it becomes clear that the FOMC will start cutting interest rates.“.

The greenback weakened against almost all G10 currencies between May 14 and May 21, sending the index down 0.4%. Bloomberg Dollar Spot. That week, investors increased their net short positions in the dollar against the euro and reduced their bullish positions against the pound, which contributed to the change in the overall position of the dollar. Net long positions in dollars against the yen continued to increase.

For investors to prepare for a new cyclical decline in the value of the dollar, the Fed must “Start playing“, He said Rodrigo Catrilchief currency strategist at National Australia Bank Limited. “Therefore, this week's PCE index will be important, so a simple or consistent number will keep expectations of a Fed rate cut alive this year.

Changes in the positions of the euro and the pound against the dollar Net long positions in dollars against other currencies (billions of dollars)

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