Hedge funds are intensifying their bearish bets on the dollar as markets await full details of the fiscal plan from U.S. Treasury Secretary Scott Bessent. The dollar suffered its worst session in nearly three weeks following the announcement to double long bond buybacks. On August 21, demand for dollar puts against the euro exceeded call options by 47 percent on contracts of at least $150 million each. Earlier in the year, speculative long positions on the dollar had reached $48 billion, their highest level since 2015, demonstrating a rapid shift in market sentiment. JPMorgan analysts have dubbed this movement the ‘debasement trade,’ a basket pairing gold and Bitcoin against the erosion of sovereign currencies.
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