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Speculators cut net long US dollar bets

New York

SPECULATORS trimmed net long bets on the US dollar in the latest week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

The value of the net long dollar position totalled US$27.11 billion in the week ended Nov 13, down from US$28.66 billion the previous week. Speculators were net long on dollars for the 22nd straight week, after being short for 48 consecutive weeks.

Net long dollar bets have fallen in three of the last five weeks.

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US 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.

In a broader 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 long position valued at US$27.895 billion, compared with US$29.951 billion a week earlier.

One of the factors that have driven the dollar's outperformance this year - the higher interest rate outlook - has been fading. Recent comments from US Federal Reserve officials have been modestly dovish.

Fed vice chair Richard Clarida on Friday said US interest rates are nearing their neutral levels, suggesting the US central bank's tightening cycle may be ending soon.

Fed chairman Jerome Powell on Wednesday and Dallas Fed president Robert Kaplan were similarly less upbeat, citing slowing global growth as a headwind to the US economy.

Kathy Lien, managing director of FX strategy at BK Asset Management in New York, said the Fed is still expected to raise interest rates next month, despite the concerns, but that rate hike could be accompanied by a less hawkish outlook.

Bitcoin on Friday was down 1.6 per cent at US$5,497.93 on the Bitstamp platform. It fell below a key US$6,000 support level two days earlier and hit a one-year low on Thursday in what has been a prolonged market slump that began early this year. REUTERS