Analyst Robin Brooks: Dollar at "Peak Strength," Poised to Fall as Positioning Turns Stretched

Analyst Robin Brooks argued the dollar is at "peak strength" and should fall from here, noting that its rise since the Fed's June 17 meeting is notable because President Trump signed a deal ending the war with Iran that same day — a de-escalation that would typically weaken the dollar rather than strengthen it.
Brooks said the recent Fed meeting was less hawkish than markets believe, and that tumbling oil prices should pull down inflation in coming months, an environment he said doesn't support further rate hikes. He pointed to CFTC Commitments of Traders data showing markets are now "max long" the dollar, with positioning nearly as stretched as during the 2012 eurozone debt crisis or 2014 ECB/BoJ easing period.
Brooks said the dollar's failure to fall alongside the Iran peace deal signals markets are "grasping at anything for an excuse to be long dollars," and that such extreme positioning sets up the market for disappointment.