US Dollar Bulls Face Reversal as Yen Bears Finally Flip

Futures traders have significantly reduced their net-long exposure to the US dollar over the past six weeks, but they remain long by $18.1 billion heading into a major central bank week.

The greenback's position is closely watched ahead of key inflation reports, with the Federal Reserve having repriced a Fed hike with an 87% probability by Friday's close.

In other developments, large speculators have finally flipped to net-long exposure to Japanese yen futures for the first time since February, driven in part by renewed bets for a hawkish Bank of Japan.