Currency traders are increasing hedges against further dollar gains ahead of Fed
chair Kevin Warsh’s speech at the Jackson Hole symposium on Friday. Since US
Treasury Secretary Bessent unexpectedly intervened last week to support the bond
market—weakening dollar sentiment—the dollar has recovered roughly half of its
earlier losses. CME data show 57.2% of dollar options traded so far this week
are positioned to benefit from a stronger dollar against a basket of major
currencies, up from 43.2% last week. Risk‑reversal measures indicate the bearish
skew has about halved. ING strategist Pesole said the event could be decisive
for FX and markets may be reluctant to build large dollar shorts. Spectra
Markets analyst Brent Donnelly said Jackson Hole may ultimately have limited
market impact: recent US data make a hawkish stance difficult for Warsh, while
Treasury efforts to restrain long yields make a dovish shift awkward.
