Futures data indicate sentiment turning bullish toward dollar

Dollar higher or lower?

Does the day's trading activity constitute an anomaly or does Monday's move lower by the dollar represent something the CFTC data could not account for?

Dollar bulls argue that Monday was not significant, pointing to likely interest rate cuts in the United Kingdom, and the possibility of a bottoming U.S. economy, as reasons to support their dollar-higher view.

Dollar bears argue that Monday was significant, noting that the U.S. trade deficit and budget deficit remain, oil is above $120 per barrel, and the U.S. financial service sector's losses/credit crisis is hardly over.

The dollar is off its lows for the year versus the euro, reached about three weeks ago, and has risen against the British pound for about two months, but that's hardly incontrovertible evidence of a dollar rally up ahead, says Andrew Resnick, independent currency trader. "We need more data either confirming that the U.S. economy is strengthening and/or interest rates in Europe are likely to fall," Resnick said.

Resnick's stance? He's presently flat, or has no open positions, pending further data.