February 3, 2017 / 9:53 PM / a year ago

UPDATE 1-U.S. dollar longs fall to lowest since late Oct-CFTC, Reuters

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    By Gertrude Chavez-Dreyfuss
    NEW YORK, Feb 3 (Reuters) - Speculators reduced bullish bets
on the U.S. dollar for a fourth straight week, as net longs fell
to their lowest since late October, according to data from the
Commodity Futures Trading Commission released on Friday and
calculations by Reuters.
    The value of the dollar's net long position totaled $18.47
billion in the week ended Jan. 31, down from $20.04 billion the
previous week.
    The U.S. currency has slumped this year, undermined by the
Trump administration's weak dollar rhetoric, driving its worst
January performance in three decades. This week was no exception
as the dollar continued to trend lower, posting its largest
weekly percentage fall in more than six months. 
    A smaller-than-expected rise in U.S. wage growth as seen in
Friday's U.S. non-farm payrolls report for January has dampened
the outlook for the dollar as well. The data
suggested that there was still some slack in the labor market
that would keep inflation in check, likely slowing the pace of
U.S. rate hikes by the Federal Reserve this year.
    "The U.S. dollar is likely to be pressured further, as it
has been since the beginning of the year, as the promise of
accelerated Fed tightening fades for the time being," said James
Chen, head of research at Forex.com in Bedminster, New Jersey. 
    CFTC data also showed net short contracts on the Japanese
yen fell to 58,331, the lowest since early December.
    The yen's moves, especially on Friday, have been mostly
dictated by the Bank of Japan's action. The BoJ on Friday
announced plans to buy an unlimited amount of 5-10 year Japanese
government bonds to "hit CPI target as soon as possible," said
BoJ Governor Haruhiko Kuroda. 
    "The (Japanese) central bank's actions are negative for JGBs
and negative for the yen and will be a factor that helps keep
dollar/yen supported," said Kathy lien, managing director of FX
strategy at BK Asset Management in New York.
    Net shorts on the Mexican peso, meanwhile, continued to fall
and in the latest week touched their lowest since late December.
The Mexican peso has been the most sensitive to U.S. President
Donald  Trump's comments about immigration and trade policies,
falling to record lows against the dollar a few weeks ago.
    The peso, however, has since recovered as investors bought
back the currency on the view that the worst was behind it. It
has been one of the best-performing currencies against the
dollar since Trump's inauguration on Jan. 20, rising about 8
    The Reuters calculation for the aggregate U.S. dollar
position is derived from net positions of International Monetary
Market speculators in the yen, euro, British pound, Swiss franc
and Canadian and Australian dollars. 
Japanese Yen (Contracts of 12,500,000 yen) $6.465 billion
         Jan. 31, 2017          Prior week
 Long             32,216            27,127
 Short            90,547            93,967
 Net             -58,331           -66,840
EURO (Contracts of 125,000 euros) $6.168 billion
         Jan. 31, 2017          Prior week
 Long            125,689           131,904
 Short           171,402           184,252
 Net             -45,713           -52,348
POUND STERLING (Contracts of 62,500 pounds sterling) $4.856
         Jan. 31, 2017         Prior week
 Long             42,232           51,521
 Short           104,004          114,693
 Net             -61,772          -63,172
SWISS FRANC (Contracts of 125,000 Swiss francs) $2.166 billion
         Jan. 31, 2017         Prior week
 Long              6,812            6,198
 Short            23,952           19,842
 Net             -17,140          -13,644
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $-0.267
         Jan. 31, 2017         Prior week
 Long             44,939           36,175
 Short            41,467           33,656
 Net               3,472            2,519
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $-0.914
         Jan. 31, 2017         Prior week
 Long             59,187           54,552
 Short            47,131           44,258
 Net              12,056           10,294
MEXICAN PESO (Contracts of 500,000 pesos) $1.517 billion
         Jan. 31, 2017         Prior week
 Long             26,000           32,133
 Short            89,208           96,787
 Net             -63,208          -64,654
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) 
$0.075 billion 
         Jan. 31, 2017         Prior week
 Long             32,712           25,851
 Short            33,734           35,734
 Net              -1,022           -9,883
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Brown)
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