Dollar Woes Continue Despite Traders Slashing Bearish Bets
The dollar slipped against its rivals on Monday despite data showing traders’ bearish bets on the greenback fell to its lowest in nearly three months.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.21% to 92.25.
The total value of speculators’ net short dollar position slumped to a nearly three-month low of $10.84 billion in the week ended May 8, from $15.15 billion the previous week, according to Commodity Futures Trading Commission data released on Friday.
Selling pressure in the dollar continued, however, as some strategists claimed that the greenback, which hit a high of 93.26 last week, was nearing its peak.
ING said last week it remained convinced that by the end of the year - and into 2019 – “structural forces” would drive the dollar to weaker levels.
The divergence between US growth and interest rates compared to the rest of the world – one of the reasons for the recent dollar rally – was nearing its peak, the bank warned. The dollar rose to year-to-date high of 93.26 on Wednesday.
The turn in sentiment on the greenback comes as both sterling and euro made a positive start to the week.
EUR/USD rose 0.29% to $1.1976 on bullish comments from European Central Bank (ECB) Governing Council member Francois Villeroy de Galhau, insisting the ECB was nearing the end of its ultra-loose monetary policy measures as first-quarter weakness in the Eurozone was transitory.
GBP/USD rose 0.32% to $1.3586, while USD/JPY rose 0.05% to Y109.45 ahead of the Japan GDP data due later this week.
USD/CAD fell 0.20% to $1.2769 as higher oil prices continued to keep a lid on the pair.