Speculative traders turned bearish on the dollar first time since mid-October.
US President Donald Trump tariff threats and plans to stimulate economic expansion had sparked a dollar rally, but signs of economic weakness and a flight out of US assets have turned the market sour on dollar prospects.
Hedge funds, asset managers and other traders have amassed $932 million worth of bets that the dollar will weaken, according to Commodity Futures Trading Commission data for the week ended March 18. That is a sharp reversal from mid-January, when the traders held $34 billion worth of wagers on a stronger dollar.
It all goes to illustrate how quickly jitters about the US economy have escalated, with bets against the dollar serving as a bit of a referendum on the first 100 days of the Trump administration, according to Helen Given, a foreign-exchange trader at Monex.
“Investors are giving a clear signal that they don’t necessarily trust the US as the steward of choice for returns, and the flight to EUR from USD in particular is quite telling.”
