August 13, 2018 — Speculators Boost US Dollar Strength


The net long US dollar position climbed to the highest level seen since January of last year, as speculators were net long dollars for an eighth week in a row, after being short for 48 weeks. On Friday, the dollar hit a 13-month high amid tension in Turkey.

The dollar’s position was established from net contracts of IMF speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.  A broader measure of strength included favorable positions against the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble.

What does this mean for your business?  As global trade and geopolitical tensions rise, the US dollar is still seen as being able to outperform other world currencies.  The implication is the US remains able to handle a trade war event.

As the dollar holds its value, now would be an opportune time to review your currency hedge programs.  With the strong US dollar, you may want to lock in future exchange rates to ensure your business will not be negatively affected by any reversals in world currency values.