Is this a sign that the dollar's surge to multi-year highs against a range of currencies in recent weeks is poised to peter out?
The amount of net-long dollar futures contracts outstanding fell $4.2 billion in the week ended March 17 to $40.5 billion, the lowest since mid-December, MarketWatch reports
, citing the Commodity Futures Trading Commission.
That change in sentiment has helped push the euro up 4.8 percent from the 12-year low of $1.0458 it hit March 13, Kit Juckes, a global strategist at Société Générale, told MarketWatch. The euro traded at $1.0947 late Monday afternoon.
He thinks the shift in the futures market will continue. "I’m sure we’ll see positioning data over the next couple of weeks that will take the long-dollar position down by a significant chunk," Juckes said. That would presumably push the dollar down further.
To be sure, some experts say any rebound by the euro will be temporary, because the eurozone economy remains very weak.
Goldman Sachs predicts the euro will slide 12 percent against the dollar over the next year. "That’s an enormous headwind for companies that are selling internationally," David Kostin, Goldman's chief U.S. equity strategist, told The Wall Street Journal
The greenback's ascent hurts U.S. multinational companies by making their exports more expensive in foreign currency terms and by making their revenue earned overseas worth less in dollar terms. Many major companies say they are suffering as a result.
"This is the most significant fiscal-year currency impact we have ever incurred," Jon Moeller, chief financial officer of Procter & Gamble, told investors in January, The Wall Street Journal reports. P&G expects the dollar's surge to slash its profit by 12 percent for the fiscal year ending in June.
But David Rubenstein, co-CEO of The Carlyle Group, told CNBC
, "Overall I think the dollar being strong is a good thing for the United States, because people want strong currencies. They want to know when they invest in a country, the currency's going to remain strong."
© 2023 Newsmax Finance. All rights reserved.