Appetite for Dollar Slumps to Lowest Since 2020 After Fed Pivot
- Traders pared dollar calls across G-10 FX and boosted yen bets
- Greenback is set for its worst week in a month, falling 1.2%
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Traders axed expectations for dollar strength after the Federal Reserve’s dovish shift sparked a rush into higher-yielding currencies.
Demand for options that benefit if the US currency appreciates fell to the lowest in more than three years versus those that pay out if the greenback weakens, according to an index of one-month risk reversals. Meanwhile, expectations for strength in the yen soared to the highest in five months.