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Speculators raise US dollar net shorts to largest since October

New York

SPECULATORS' net short US dollar bets rose to a five-month high last week, according to calculations by Reuters and Commodity Futures Trading Commission data released last Friday.

The value of the net short US dollar position was US$14.61 billion in the week to March 13, compared with US$11.46 billion the previous week.

Net short positioning on the greenback has increased for a third straight week. 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.

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In a wider measure of US 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$17.29 billion, up from US$14.51 billion the week before.

The US dollar has been under pressure over the last two weeks due to fears about trade protectionism with the imposition of US tariffs on steel and aluminium.

Departures of key members of US President Donald Trump's cabinet also weighed on the US dollar, given the uncertain political outlook.

"The unprecedented turnover at the highest levels of the administration has not only fanned worries about the instability and unpredictability of this government but has also raised concerns that there are now fewer checks against the protectionist leanings of the president," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

So far this year, the US dollar has fallen 2 per cent against a basket of six major currencies, following a 10 per cent loss in 2017.

Meanwhile, speculators' net short position on bitcoin Cboe futures rose to 1,716 contracts in the latest week, from 1,599 the previous week, the data showed.

Bitcoin has lost nearly 40 per cent of its value so far this year, hurt by increased scrutiny from regulators around the world led by the Securities and Exchange Commission. Other cryptocurrencies have tumbled in value as well.

Bitcoin last Friday was last up 3.1 per cent at US$8,522.79 on the Luxembourg-based exchange Bitstamp. REUTERS