Dollar Rebound Meets Diverging Forex Bets

The US dollar rebounded after the hawkish speech by Warsh at Jackson Hole, but positioning beneath the surface remains mixed.

Futures traders remained firmly net-long ahead of the event, with a net exposure of $26.3 billion, despite reducing aggregate USD exposure by $8 billion.

The euro longs had begun to recover, while yen positioning diverged sharply between large speculators and asset managers.

AUD, NZD, and CAD futures showed very different shifts in exposure, with open interest rising to a record high for AUD/USD.

This week's ISM and NFP reports will determine whether the US dollar rebound extends or begins to fade.