Although the current bullish bet on the US dollar is extremely high, the fundamental support logic behind it remains stable, and the driving force behind the strengthening of the US dollar has surpassed simple US Federal Reserve policy expectations. According to the latest data from the US Commodity Futures Trading Commission, the total number of long positions in the US dollar has climbed to its highest level in nearly 11 years. Theoretically, extremely crowded trading positions can easily cause reverse squeezing, but the current market structure shows that this is more a reflection of the market's firm consensus on the long-term bullish view of the US dollar. The current strengthening of the US dollar is mainly supported by two core factors. The first is the linkage between geopolitics and energy markets. The continuation of the Iran conflict provided the US dollar with the dual support of improved terms of trade and safe-haven attributes. Despite the recent decline in oil prices, the risk of another sharp rise in crude oil prices is still high. This makes it difficult for European currencies to gain substantial popularity, and capital still tends to flow back into US dollar assets. Second, there are structural benefits brought about by the boom in artificial intelligence investment. AI trading continues to drive capital inflows into US assets, while boosting market expectations for US economic growth and inflation. This not only provides a reason for the Federal Reserve to tighten monetary policy in the future, expanding the dollar's arbitrage advantage, but also provides additional safe-haven requirements for the US dollar when sentiment in the technology market worsens. The biggest uncertainty in the market this week is the Federal Reserve's interest rate decision. Of the 101 economists surveyed by Bloomberg, only one expected the Fed to raise interest rates, reflecting market consensus that inflation stabilized in June, and policymakers' tendency to wait for progress in a task force led by Federal Reserve Chairman Walsh.

Although the current bullish bet on the US dollar is extremely high, the fundamental support logic behind it remains stable, and the driving force behind the strengthening of the US dollar has surpassed simple US Federal Reserve policy expectations. According to the latest data from the US Commodity Futures Trading Commission, the total number of long positions in the US dollar has climbed to its highest level in nearly 11 years. Theoretically, extremely crowded trading positions can easily cause reverse squeezing, but the current market structure shows that this is more a reflection of the market's firm consensus on the long-term bullish view of the US dollar. The current strengthening of the US dollar is mainly supported by two core factors. The first is the linkage between geopolitics and energy markets. The continuation of the Iran conflict provided the US dollar with the dual support of improved terms of trade and safe-haven attributes. Despite the recent decline in oil prices, the risk of another sharp rise in crude oil prices is still high. This makes it difficult for European currencies to gain substantial popularity, and capital still tends to flow back into US dollar assets. Second, there are structural benefits brought about by the boom in artificial intelligence investment. AI trading continues to drive capital inflows into US assets, while boosting market expectations for US economic growth and inflation. This not only provides a reason for the Federal Reserve to tighten monetary policy in the future, expanding the dollar's arbitrage advantage, but also provides additional safe-haven requirements for the US dollar when sentiment in the technology market worsens. The biggest uncertainty in the market this week is the Federal Reserve's interest rate decision. Of the 101 economists surveyed by Bloomberg, only one expected the Fed to raise interest rates, reflecting market consensus that inflation stabilized in June, and policymakers' tendency to wait for progress in a task force led by Federal Reserve Chairman Walsh.