The Dollar has continued to sell-off since and the USS Dollar Index has now reversed almost three-quarters of the move higher recorded between the January and September of last year. It still leaves room for the USD to continue correcting lower through the rest of this year.

The latest IMM positioning report revealed that Leveraged Funds have built up short USD exposure in recent weeks but the total size of short positions are relatively modest and leaves room for further speculative selling in the near-term. However, one limitation of the report is that it only shows positioning up to the 11th July, and it is likely that short positions will have been increased further last week.

In the week ahead, there are no major US economic data releases or events that are likely to trigger a reversal of the US Dollar weakening trend ahead of the Fed’s next policy meeting on 26th July.