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UPDATE 1-Speculators push long U.S. dollar bets to 11-month peak -CFTC, Reuters
December 9, 2016 / 10:10 PM / 8 months ago

UPDATE 1-Speculators push long U.S. dollar bets to 11-month peak -CFTC, Reuters

(Adds details on dollar, yen, euro contracts, adds comments,
byline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 9 (Reuters) - Speculators increased positive
bets on the U.S. dollar for a third straight week, pushing net
longs to their highest since early January.
    The value of the dollar's net long position rose to $28.14
billion in the week ended Dec. 6, from $24.82 billion in the
previous week, according to Reuters calculations and data from
the Commodity Futures Trading Commission released on Friday.
    The continued rise in long dollar positioning is not a
surprise given expectations of higher inflation with increased
infrastructure spending under a Trump administration.
    With more upbeat U.S. economic data including a generally
solid U.S. non-farm payrolls report for November, the Federal
Reserve is widely expected to raise interest rates next week.
That expectation has underpinned the dollar for the past several
weeks, with the greenback posting a 3 percent gain so far this
year.
    The focus now turns to the number of rate increases the Fed
could signal at the conclusion of the policy meeting on
Wednesday. 
    "There have actually been widespread improvements in the
U.S. economy with consumer spending up and inflation on the
rise," said Kathy Lien, managing director of FX strategy at BK
Asset Management in New York.
    "The dollar will rise if the dot plot shows expectations for
more than two rate hikes in 2017. The last plot had Fed
Presidents looking for 50 basis points of tightening next year."
    Net shorts on the yen, meanwhile, rose to their largest
since December last year, at 33,937 contracts. Speculators
turned net short the yen last week after months of being long.
    The yen has been engulfed in a Trump-inspired dollar rally.
The longer-term rate differentials between the U.S. and Japan
10-year notes continue to widen at more than 200 basis points,
the largest gap in favor of the U.S. dollar since 2010 and
supporting further gains in the greenback against the yen.
    Euro short contracts, on the other hand, fell to 114,556,
their lowest since mid-October. 
    The euro retains a weak tone against the dollar after
Thursday's steep fall in the wake of the European Central Bank's
decision to extend its quantitative easing by nine months. 
    "Heavy losses yesterday and no real bounce into the end of
the week suggest euro/dollar may be on the cusp of another
biggish shunt lower," said Shaun Osborne, chief FX strategist,
at Scotiabank in Toronto. 
    The Reuters calculation for the aggregate U.S. dollar
position is derived from net positions of International Monetary
Market speculators in the yen, euro, sterling, Swiss franc and
Canadian and Australian dollars.
    
Japanese Yen (Contracts of 12,500,000 yen) 
$3.722 billion
         06 Dec 2016            Prior week
         week             
 Long             74,367            72,124
 Short           108,304            72,393
 Net             -33,937              -269
 
EURO (Contracts of 125,000 euros)
$15.346 billion
         06 Dec 2016            Prior week
         week             
 Long            123,390           136,108
 Short           237,946           255,348
 Net            -114,556          -119,240
 
POUND STERLING (Contracts of 62,500 pounds sterling)
$6.119 billion
         06 Dec 2016           Prior week
         week             
 Long             43,169           50,806
 Short           120,407          128,941
 Net             -77,238          -78,135
 
SWISS FRANC (Contracts of 125,000 Swiss francs)
$3.143 billion
         06 Dec 2016           Prior week
         week             
 Long              9,859           13,027
 Short            35,256           37,361
 Net             -25,397          -24,334
 
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
$1.368 billion
         06 Dec 2016           Prior week
         week             
 Long             21,538           25,010
 Short            39,696           43,586
 Net             -18,158          -18,576
 
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-1.557 billion 
         06 Dec 2016           Prior week
         week             
 Long             48,274           54,791
 Short            27,403           33,834
 Net              20,871           20,957
 
MEXICAN PESO (Contracts of 500,000 pesos)
$1.326 billion
         06 Dec 2016           Prior week
         week             
 Long             18,619           19,314
 Short            72,685           73,814
 Net             -54,066          -54,500
 
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
$0.281 billion 
         06 Dec 2016           Prior week
         week             
 Long             27,641           30,231
 Short            31,593           32,103
 Net              -3,952           -1,872
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Brown
and Andrew Hay)

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