02 June 2014 at 7:29 GMT
Hedge funds increased their bullish dollar exposure by selling CHF, EUR and JPY during the week of May 27, according to the latest Commitment of Traders report. The EUR net-short rose to a ten-month high ahead of the much-awaited European Central Bank meeting later this week.
Four out of the eight IMM currency futures tracked in this were net sold resulting in the gross long dollar position rising by USD 2.6 billion to 2.7 billion.
The popularity of the Mexican peso continues with the net-long rising to a one year high. Overall the best performing currencies belonged to the NAFTA group of currencies which also include the dollar and the CAD.
-- Edited by Martin O'Rourke
Ole Hansen is head of commodity strategy at Saxo Bank. For more of Ole's analysis, click here.