Speculators' bearish bets on US dollar at a near 2-year high: CFTC

New York

SPECULATORS' net bearish bets on the US dollar grew to the largest position in nearly two years in the latest week, according to calculations by Reuters and US Commodity Futures Trading Commission (CFTC) data which were released on Friday.

The value of the net short dollar position was US$11.51 billion for the week ended April 21, compared with a net short position of US$11.39 billion for the week before that.

US dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound, Swiss franc and Canadian and Australian dollars.

To be long on a currency means that traders believe it will rise in value, while being short points to a bearish bias.

In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian rouble, the US dollar posted a net short position valued at US$10.65 billion, compared with a net short position of US$10.52 billion, a week earlier.

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Investors' renewed appetite for risky assets in recent weeks has pressured the dollar, which usually gets a boost from safe-haven demand.

The US Dollar Currency Index, which measures the greenback's strength against six other major currencies, has slipped 2.5 per cent since touching a more than three-year high in late March.

"The improved supply of dollar in tandem with the Fed's aggressive policy actions on interest rates and on QE have sparked a discussion about whether the US dollar is now primed for a correction," Jane Foley, senior FX strategist at Rabobank, said in a note. "While the easing of panic in the market has taken the US dollar index off its recent highs, in our view the US dollar cannot be expected to weaken decidedly until investors feel confident enough to move back into emerging markets. This could be some way off," she said.

On Friday, the greenback eased against the euro, snapping a four-day winning streak as investors covered some bearish bets against the common currency, but broader concerns about the euro's outlook kept dollar bears in check. REUTERS