(Reuters) Speculators increased bearish net-short bets against the dollar to $9.40 billion in the latest week of trading, data from the Commodity Futures Trading Commission calculated by Reuters showed on Friday.
The increase in short contracts came as speculators have increasingly lost faith in U.S. President Donald Trump’s ability to pass his proposed tax cuts and infrastructure spending plans, which were expected to pump up growth and inflation, increasing the pace of interest rate hikes by the Federal Reserve.
Higher interest rates provide better yield to investors and make a currency more attractive.
“Momentum has been against the dollar this whole summer and with volume low and not too much happening before today’s Jackson Hole meeting that momentum is going to continue with nothing to stop the dollar from falling,” said John Doyle, director of markets at Monex Inc in Washington.
