February 23, 2018 / 9:45 PM / 4 months ago

UPDATE 1-Speculators' net short U.S. dollar bets drop to 7-week low -CFTC, Reuters

 (Adds details, analyst comment, bylines, table)
    By Gertrude Chavez-Dreyfuss and Saqib Iqbal Ahmed
    NEW YORK, Feb 23 (Reuters) - Speculators' net short dollar
bets slipped to a seven-week low this week, according to
calculations by Reuters and Commodity Futures Trading Commission
data released on Friday, as investors priced in more interest
rate increases by the Federal Reserve.
    The value of the net short dollar positions, was $8.17
billion in the week to Feb. 20, compared with net shorts of
$8.19 billion the previous week. Net short positioning on the
greenback has declined for three straight weeks.
    U.S. dollar positioning was derived from net contracts of
International Monetary Market speculators in the yen, euro,
British pound, Swiss franc and Canadian and Australian dollars.
    To be short a currency means traders believe it will fall in
value.
    In a broader measure of dollar positioning
that includes net contracts on the New Zealand dollar, Mexican
peso, Brazilian real, and Russian rouble, the U.S. dollar posted
a net short position valued at $11.62 billion, down from $12.03
billion the week before.
    The prospect of further interest rate increases than what
the market has priced in has bolstered the dollar over the last
few weeks. Concerns about rising inflation after a prolonged
period of stagnant price gains have raised the possibility that
the Fed could tighten more than expected this year and the next,
an expectation that has boosted yields and lifted the dollar.
    "Higher U.S. yields are an argument in favor of investing in
the U.S. currency, in particular as yields in Europe and Japan
remain stuck in negative territory," said Ulrich Leuchtmann, an
analyst at Commerzbank in a research note.
    "In other words: the bargain prices of U.S. bonds are a
buffer against possible dollar weakness and thus make the dollar
more attractive."
    The dollar index though was still down 2.4 percent so far
this year, after losses of nearly 10 percent in 2017.
    Meanwhile, speculators' net short position on bitcoin Cboe
futures fell to 1,608 contracts, down from a net short position
of 1,875 contracts in the prior week, the data showed.
    Mirroring the dollar's net positioning, bitcoin's net short
contracts fell for a third straight week.
    Bitcoin has recovered after hitting its lowest rate this
year below $6,000, as investors bought it back as they prepare
for a rally that would take the digital currency to even higher
levels.
   The original cryptocurrency gained more than 1,300 percent
last year, capped by a lifetime peak just shy of $20,000 on Dec.
17. 
       
Japanese Yen (Contracts of 12,500,000 yen) 
 $12.62 billion
         20 Feb 2018            Prior week
         week             
 Long             45,634            42,299
 Short           153,972           157,808
 Net            -108,338          -115,509
 
EURO (Contracts of 125,000 euros)
 $-19.449 billion
         20 Feb 2018            Prior week
         week             
 Long            229,273           230,785
 Short           103,147           103,496
 Net             126,126           127,289
 
POUND STERLING (Contracts of 62,500 pounds sterling)
 $-0.682 billion
         20 Feb 2018           Prior week
         week             
 Long             57,953           64,164
 Short            50,150           49,224
 Net               7,803           14,940
 
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $2.108 billion
         20 Feb 2018           Prior week
         week             
 Long             17,063           17,763
 Short            32,851           37,688
 Net             -15,788          -19,925
 
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $-1.829 billion
         20 Feb 2018           Prior week
         week             
 Long             49,373           62,535
 Short            26,246           30,006
 Net              23,127           32,529
 
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-0.936 billion 
         20 Feb 2018           Prior week
         week             
 Long             47,170           49,208
 Short            35,295           40,127
 Net              11,875            9,081
 
MEXICAN PESO (Contracts of 500,000 pesos)
 $-2.535 billion
         20 Feb 2018           Prior week
         week             
 Long            127,065          122,762
 Short            32,244           25,984
 Net              94,821           96,778
 
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $-0.069 billion 
         20 Feb 2018           Prior week
         week             
 Long             29,422           28,648
 Short            28,478           26,428
 Net                 944            2,220
 
 (Reporting by Gertrude Chavez-Dreyfuss and Saqib Igbal Ahmed;
Editing by Jonathan Oatis)
  
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