Dollar Rebound Meets Divergent Forecasts as Futures Traders Hold Net-Long Positions
The US dollar rebounded after Jackson Hole, driven by hawkish comments from Federal Reserve Governor Christopher Waller. Despite this, futures traders remain net-long, with a $26.3 billion aggregate exposure.
A closer look at the COT report reveals diverging positions among large speculators and asset managers. Euro longs have begun to recover, but yen positioning remains sharply divided between these groups. Meanwhile, AUD, NZD, and CAD futures show distinct shifts in exposure.
This week's ISM and NFP reports will be crucial in determining the extent of the US dollar rebound. A strong showing could see the dollar extend its gains, while a weak performance may lead to a reversal. The EUR/USD chart shows a bearish engulfing candle formed after Jackson Hole, suggesting that some cautious longs have already been cleared out.