Hedge funds, asset managers and other participants in the futures market were all bearish on the dollar in the week ending Aug. 27, according to the latest data from the U.S. Commodity Futures Trading Commission (CFTC). The last time they held a net short position in the dollar was in February, when traders prematurely predicted about six rate cuts in 2024. The dollar fell 1.6 percent in August, its biggest one-month drop this year. Traders have been pushing down the dollar and Treasury yields in anticipation that the Federal Reserve will cut rates by at least 25 basis points in September. But this time, Fed officials have made clear their intention to begin cutting rates for the first time since 2020. Swap transactions are pricing in a full percentage point cut this year.