Forex
US Dollar Rebounds on Warsh Speech as Aussie Dollar Snaps Winning Streak
US dollar futures traders remained net-long ahead of Jackson Hole, despite aggregate exposure falling to $26.3 billion from $34.3 billion last week.
This rebound in the US dollar was sparked by Federal Reserve Governor Kevin Warsh's hawkish speech at Jackson Hole, which reignited expectations of rate hikes.
However, positioning beneath the surface remains mixed, with euro longs recovering and yen positioning diverging sharply between large speculators and asset managers.
The Australian dollar (AUD) was also affected, snapping an eight-week winning streak due to Warsh's speech, while stronger inflation and household spending in Australia raise expectations of another Reserve Bank of Australia hike.