Global traders have turned the most optimistic about the dollar's prospects since 2015, as bets on borrowing costs staying higher for longer fueled a month-long rally in the US currency.

Bullish dollar bets rose to around $40 billion as of June 30, the highest amount in more than a decade, according to data from the Commodity Futures Trading Commission released Monday.

The latest CFTC data, which includes positions held by asset managers, hedge funds, and currency speculators, comes after the dollar ended June up 2%, one of its best monthly performances in the past year.

Mon, 06 2026

The latest trader bets reflect the prevailing tone on Wall Street, where strategists from major banks including JPMorgan Chase & Co, Bank of America Corp, and Goldman Sachs Group Inc have been promoting a potential rally in the US currency.

While other major central banks around the world are seen as less aggressive when it comes to raising borrowing costs, the Federal Reserve is still expected to tighten monetary policy more than some of its key peers. This view has strengthened the dollar.

Sun, 05 2026

Interest rate bets support dollar

Andrew Hazlett, a foreign exchange trader at Monex Inc, said 'Most of the dollar's strength comes from the interest rate narrative.'

Traders now see the Federal Reserve raising interest rates at least once this year. That marks a stark contrast from before the start of the war with Iran in late February, when traders still expected the central bank to cut borrowing costs in 2026.

After the US and Israel attacked Iran, disrupting a major waterway for crude tankers, oil prices surged and inflation fears increased, alarming policymakers worldwide. As the world's largest oil producer, the US and its currency as a safe haven benefited from these concerns.

Sat, 04 2026

Jane Foley, head of currency strategy at Rabobank, said 'The Fed rate hike expectations, along with the resilience of the US economy, have been positive factors for the dollar, given that the growth risks from a closure of the Strait of Hormuz would be greater in the euro zone and elsewhere.'

Despite the optimism, some strategists still argue that the rally will soon lose momentum, as the market is overestimating the extent of rate hikes in the US.

Weaker-than-expected US jobs data last week helped support the dollar bears, as hiring slowed sharply in June, undermining bets on rate increases. So far this month, the dollar has edged lower.