Bullish USD Bets Hit 11-Year High; Soft Jobs Data Sparks Trend Doubts

Global traders hold the most upbeat outlook for the US dollar since 2015, driven by persistent bets that US interest rates will stay elevated, fuelling a one-month greenback rally.

CFTC data released July 6 shows net bullish USD wagers reached nearly $40 billion as of June 30, marking the largest bull positioning in over a decade. The dataset covers asset managers, hedge funds and currency speculators, arriving after the dollar notched a 2% monthly gain in June — one of its strongest performances across 2026.

The rally took shape after Fed Chair Kevin Warsh pledged to rein in inflation, pushing markets to price in additional rate hikes. Top Wall Street banks including JPMorgan, BofA and Goldman Sachs have all turned bullish on the US currency, aligning with broad market positioning.

Relative hawkishness of the Fed stands out against other global central banks, which remain far more hesitant to tighten monetary policy. This rate differential remains the core pillar supporting dollar strength.

“Most of the dollar’s strength is coming from the rates narrative,” said Andrew Hazlett, FX trader at Monex.

Market pricing has shifted drastically since the outbreak of Iran conflict on February 28. Back then, traders expected Fed rate cuts in 2026; now markets fully price at least one rate hike before year-end.

Military strikes by the US and Israel on Iran disrupted crude shipping via the Strait of Hormuz, sending oil prices surging and reviving global inflation fears. As the world’s top oil producer and traditional safe-haven asset, the US dollar drew strong demand amid market anxiety.

“Fed hike expectations paired with solid US economic resilience underpin the dollar. The Eurozone and other regions face far larger growth risks from Hormuz supply disruptions,” Jane Foley, head of FX strategy at Rabobank, explained.

Despite the overwhelming bullish consensus, a cohort of strategists warn the dollar rally may stall as markets overprice aggressive Fed tightening.

June’s much softer US payroll report bolstered bearish arguments, with steep cooling in hiring scaling back hike odds. The dollar has edged lower so far in July as investors dial back overly hawkish bets.