Traders Are Paring Bearish Dollar Bets Leading Into US Election
- USD sentiment sees biggest positive swing since 2021: CFTC
- Euro, Mexican peso vulnerable to selloff ahead, Citi says
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Speculative currency traders who vacillated all year between bullish and bearish views on the dollar just made their biggest move in three years ahead of the US election.
Hedge funds and asset managers in the second week of October reduced dollar shorts, or bets against the greenback, by some $8 billion. That net positive swing in trades was the largest since the depths of the pandemic in 2021, latest data released by the Commodity Futures Trading Commission and compiled by Bloomberg show. After entering the month holding more than $13 billion in bearish wagers on the greenback, these derivatives traders are now effectively flat.