You are here

Speculators trim net US-dollar shorts for second week

New York

SPECULATORS' net short US dollar bets fell for a second straight week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

The value of the net short dollar position was US$20.71 billion in the week to April 3, compared with US$21.73 billion in the previous week. The market has been short the US dollar since the middle of July last year.

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.

Market voices on:

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$24.966 billion, down slightly from US$25.868 billion the week before.

US dollar positioning was consistent with the currency's recovery over the last two weeks, posting gains of about 0.7 per cent. For the year, though, the US dollar remained down more than 2 per cent.

Traders, however, believed the latest moves in the futures market were a result of position adjustment after accumulating extreme shorts on the US dollar in the last few months.

Overall, the US dollar's outlook continued to be weak.

The trade dispute between the US and China has hurt the US dollar's prospects, obscuring any benefit derived from a Federal Reserve that's on a tightening path.

"By the middle of next year, we think that the prospect of slower growth in the US economy will bring the Fed's tightening cycle to an end while other major central banks are closer to, or in the process of, tightening policy," Oliver Jones, markets economist at Capital Economics, said.

"This would probably see the gap in expected interest rates between the US and other advanced economies move against the dollar."

In other currency pairs, US dollar/yen positioning switched to a net long of 3,572 contracts. REUTERS