Dollar Tumbles Towards Four-Month Lows Ahead of Fed Meeting

The US dollar has been in decline for three consecutive months and is now hovering around four-month lows, testing the 98.50 level.

According to CFTC figures, non-commercial net longs have slipped to just over 17K contracts, with a four-week change of around -5.5K, indicating a broader bearish trend.

The data also shows that open interest rose by 4.3% to over 50K contracts, suggesting new shorts rather than a simple long unwind, and speculative exposure fell to 34.04% from 38.96%, with the net-position percentile easing to 63.9.

With the Federal Reserve meeting next week, traders should expect heightened volatility in the coming weeks, and derivative traders should be prepared for sharp swings rather than a straight-line trend.