Hedge funds are on course to be outright bullish on the dollar by the end of the month having already cut their short positions on the greenback to the lowest level seen in three months, according to a report by Reuters.

The report cites the latest Commodity Futures Trading Commission (CFTC) data as showing that funds have cut their net short dollar positions to $7.17bn, a third of the level seen six weeks ago.

The rate of the sell-off is accelerating with the net-short position having halved in the last two weeks at the same time as the dollar has risen to a six-month high against a basket of currencies.