The number of bets that the dollar will strengthen has fallen to the lowest level since August 2014. Total long dollar positions—the aggregate value of bets in the futures market that the dollar will rise—declined by $2.1 billion to $19.1 billion, according to an analysis of Commodity Futures Trading Commission data.
The dollar has weakened since the Federal Reserve decided to leave interest rates on hold at its September policy meeting. A recent spate of weak economic data — including signs of lackluster job creation in September — prompted economists to push back their expectations for the timing of the Fed’s first interest rate hike. Many now believe the central bank will wait until 2016 to raise interest rates.
The prospect of higher interest rates in the U.S. caused the currency to strengthen because higher rates would increase the return on dollar holdings. That, market strategists believed, would attract more foreign money to U.S. assets.
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