The latest data from the U.S. Commodity Futures Trading Commission and LSEG indicates a decrease in speculators' net short positions on the U.S. dollar, coinciding with the greenback's rebound amid reduced expectations of Federal Reserve easing in March. The value of net short dollar positions fell to $9.799 billion, down from $12.7 billion the previous week, marking the largest decline since August. Speculative sentiment toward the dollar shifted notably, with a significant decrease in net euro longs. Institutional investors also decreased their significant shorts on the dollar, while leveraged accounts or hedge funds reduced net dollar longs. The dollar is set for a second consecutive weekly gain of 0.8%, supported by solid U.S. economic data and statements from Fed officials indicating a tempered outlook for rate cuts in the near term. Market expectations of a rate cut at the March meeting have decreased to less than 50%, compared to 80% the previous week. For 2024, futures traders anticipate five rate cuts of 25 basis points each, down from expectations of six cuts last week. Overall, the data reflects a more stable sentiment toward the U.S. dollar, with investors adjusting their positions in response to evolving economic and monetary policy expectations.
