CFTC FX positioning data show that speculators have continued to rebuild long US Dollar positions. The Dollar is being used as a safe haven during the Middle East conflict.
Current long USD positions are smaller than their peaks in recent years, even though the Dollar has risen in the spot market since late February. Near-term moves are linked to risk appetite and changing expectations for US interest-rate cuts.
Dollar Safe Haven Demand
The Dollar’s safe-haven role is tied to its liquidity and its widespread use for global transactions. It is expected to keep this role for now.
The article also notes ongoing de-dollarisation pressures from Russia, China and the EU. It states the piece was produced using an AI tool and reviewed by an editor.
Speculators have continued to rebuild their long US dollar positions, as the currency remains the preferred safe haven amid ongoing Middle East conflicts. We expect the dollar to keep acting as a safe haven during periods of reduced risk appetite. This trend is likely to draw additional support from dwindling hopes of a near-term US rate cut.
The dollar’s strength is also being fueled by stubborn inflation data. The most recent US Consumer Price Index report from March 2026 came in at 3.1%, causing markets to push back expectations for a Federal Reserve rate cut until later in the year. This marks a significant change in outlook from the more dovish sentiment we saw building in the second half of 2025.
Trading And Hedging Approaches
Current long USD positions held by speculators, as reported by the CFTC, have now reached over $15 billion, a significant increase since February. However, this is still considerably smaller than the peaks of over $40 billion that we saw in 2022. This suggests that if global tensions escalate further, there is still room for more capital to flow into the dollar.
For traders looking to capitalize on this trend, buying call options on the Dollar Index (DXY) can provide upside exposure with a defined risk. Selling puts on currency pairs like EUR/USD is another way to express a bullish dollar view, collecting premium as the dollar benefits from its safe-haven credentials. The dollar’s role as the world’s primary transactional currency anchors this status for now.
Despite the current environment, longer-term de-dollarisation pressures from Russia, China, and even the EU persist as a background factor. Traders holding assets in other currencies might consider using options to hedge against further dollar strength in the coming weeks. This can protect portfolios from near-term volatility driven by risk appetite and US interest rate expectations.
