US dollar net long bets skid to lowest since mid-August 2021

New York

SPECULATORS' net long positioning in the US dollar dropped in the latest week to its lowest since mid-August 2021, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday (Feb 11).

The value of the net long dollar position fell to US$7.81 billion for the week ended Feb 8 from US$9.78 billion the previous week. US dollar net long positioning fell for a fourth consecutive week.

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

In a wider measure of dollar positioning, which includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian rouble, the greenback posted a net long position of US$7.565 billion this week, from US$10.335 billion in the prior week.

The US dollar last week was down nearly 2 per cent, the largest weekly percentage decline since November 2020, despite data showing that the world's largest economy created far more jobs than expected.

The jobs data raised the chances of a larger Federal Reserve interest rate increase at the March policy meeting.

The week also saw major policy decisions from the Bank of England and European Central Bank, helping both sterling and the euro.

The decline in the US dollar's net long benefited the euro, whose bullish bets rose to 38,842 contracts, which Scotiabank said was the largest since August last year.

Sterling, on the other hand, gained last week after the Bank of England raised interest rates to 0.5 per cent and nearly half of its policymakers wanted a bigger increase to contain rampant price pressures, as the central bank warned inflation will soon top 7 per cent. REUTERS