The optimism surrounding the US dollar is growing among hedge funds and asset managers due to the strong US economy and increasing geopolitical tensions.

According to recent data from the Commodity Futures Trading Commission, institutional investors, including pension funds, insurance firms, and mutual funds, have significantly reduced their net dollar short positions to $2.05 billion as of December 3, the lowest level since April 2017.

At the same time, hedge funds have increased their bullish positions on the dollar by 9.3% since October, indicating a positive outlook on the currency. This change in sentiment reflects a broader reassessment of expectations for the dollar's performance in the current economic climate.