**[Wall Street Turns Bullish on the Dollar: Hawkish Stance from Waller, AI Capital Inflows Drive Long Dollar Positions to $29.4 Billion]** BlockBeats News, June 26 — The U.S. dollar has continued to strengthen throughout June, with the Bloomberg Dollar Spot Index rising 2.1% this month, nearing its best monthly performance in the past year and reaching its highest level since November last year. Major Wall Street institutions such as JPMorgan Chase, Goldman Sachs, and Bank of America have concluded that market sentiment toward the dollar has undergone a directional reversal, with the previously popular "de-dollarization" narrative clearly fading. Institutions generally attribute this shift to three key drivers. The first is Federal Reserve Chair Waller's hawkish stance—after emphasizing the restoration of price stability and signaling clear tightening measures, JPMorgan's co-head of FX strategy noted, "The Fed has activated the logic for dollar appreciation, and other central banks can't keep up, leading to a continued narrowing of interest rate differentials." The second driver is the AI investment boom, which is fueling sustained capital inflows into the U.S. Goldman Sachs' chief FX strategist stated, "AI-related trading is boosting U.S. growth expectations and equity returns, making the U.S. an exceptionally attractive destination for capital." The third is the relative resilience of the U.S. economy, which has reignited the dominant logic of "U.S. exceptionalism." Position data supports these assessments. CFTC data shows that as of June 16, hedge funds and asset management firms held $29.4 billion in long dollar positions. Bank of America has lowered its year-end EUR/USD target from 1.20 to 1.15 and expects the Fed to raise rates three more times this year. Meanwhile, Man Group predicts the dollar still has approximately 5% upside potential by year-end. However, the upside remains constrained. Analysts point out that rate hike expectations have already been partially priced in, and the premium for options used to hedge against dollar appreciation is near its highest level in over a year. For the dollar to appreciate significantly further, the Fed would need to raise rates beyond current market expectations. Goldman Sachs forecasts that currencies of Asian oil-importing countries, such as the Thai baht and Philippine peso, will face the most pressure, while high-yield and trade-sensitive currencies will experience relatively limited impact. [Original Link]