Live Markets: Recent dollar bullishness starting to waver

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27/04/2026 09:53

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RECENT DOLLAR BULLISHNESS STARTING TO WAVER

In a monster week for central banks, investors are also having to navigate war in Iran, a slew of key earnings, including those from the so-called "Magnificent 7" megacap stocks. Optimism over AI is looking set to outweigh worry over the war, as stocks hit record highs. The dollar donned its safe-haven mantle once again last week, as oil burst back above $100 a barrel and peace talks led nowhere. But under the surface, investors quietly chipped away at most of their bullish dollar positions, with the exception of the Japanese yen.

Weekly data from the CFTC shows speculators cut their bearish euro position by nearly 60% to $2.833 billion, according to LSEG data. This is not far off early April's seven-month high, but marked the second week in a row in which the net short position - one that assumes the euro will fall in value against the dollar - has shrunk. A similar pattern appears in the sterling position and several other currencies, leaving the dollar's net long position against other G10 currencies 0#NETUSDG10= at $13.5 billion, 30% below early April's 14-month high of nearly $20 billion.

The yen is the outlier. The net short position grew another $800 million to $7.41 billion, its largest since late July 2024, when investors were rapidly unwinding bearish bets on the Japanese currency after Tokyo officials intervened to strengthen it earlier in the month JPYNETUSD=.

The Bank of Japan, along with the Federal Reserve, Bank of England and European Central Bank, meets this week to set monetary policy. Since the last meeting in March, the yen has weakened by around 1% against the dollar and is hovering narrowly below the 160-level that many see as the threshold for official intervention. The expectation is for no move this week, but a signal that a June hike is coming. Bank of America says a "hawkish hold" may be in the offing.

(Amanda Cooper)

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EARLIER ON LIVE MARKETS:

STEADY START CLICK HERE

EUROPE BEFORE THE BELL: FUTURES HOLDING STEADY CLICK HERE

HORMUZ AND HYPERSCALERS CLICK HERE

SK Hynix reports record quarterly operating profit https://www.reuters.com/graphics/SK%20HYNIX-RESULTS/byprnblwzpe/chart.png

Steady start after weekend Iran news https://www.reuters.com/graphics/GLOBAL-STOCKS/zdvxgjznepx/chart.png

Japan yen positioning Japan yen positioning https://www.reuters.com/graphics/JAPAN-FOREX/JAPAN-FOREX/akveyjkagvr/Pasted%20image%201777273139309.png