May 25, 2018 / 8:50 PM / a year ago

UPDATE 1-Bearish U.S. dollar bets at lowest since early January

 (Adds table, comment, details, byline)
    By Saqib Iqbal Ahmed
    NEW YORK, May 25 (Reuters) - Speculators' net short dollar
bets fell in the last week to the lowest since early January,
according to calculations by Reuters and Commodity Futures
Trading Commission data released on Friday.
    The value of the net short dollar positions, derived from
net positions of International Monetary Market speculators in
the yen, euro, British pound, Swiss franc and Canadian and
Australian dollars, was $7.98 billion in the week to May 22.
    That compares with a net short position of $9.82 billion the
previous week and is the smallest net short dollar position
since early January.
    To be short a currency means traders believe it will fall in
    In a wider measure of dollar positioning that
includes net contracts on the New Zealand dollar, Mexican peso,
Brazilian real and Russian ruble, the U.S. dollar posted a net
short position valued at $8.45 billion, compared with a short
position valued at $11.02 billion a week earlier.
    Since mid-April, the dollar has rallied hard, helped by
rising U.S. Treasury yields and solid economic data that puts
the Federal Reserve on track to raise interest rates at least
two more times this year.
    On Friday, the dollar index, which measures the
greenback against a basket of six currencies, was up 0.48
percent at 94.209, after hitting a high of 94.249, its strongest
since mid-November. The index has logged weekly gains in five of
the last six weeks.
    Despite its sharp rebound in recent weeks, speculators have
consistently retained a net short bias against the greenback
since mid-July.
    "I don't think we are in a dollar bull market," said Aaron
Hurd, senior portfolio manager at State Street Global Advisors
in Boston. 
    "The dollar is more balanced right now," he said.
    Most foreign exchange strategists expect the dollar's
newfound shine to fade as the U.S. economy's strength and higher
interest rates fail to support the currency's resurgence for
long, an early May Reuters poll found.
    Euro net longs, meanwhile, shrank to 109,744 contracts, the
smallest position since late December, CFTC data showed.
    The euro weakened on Friday and logged its sixth consecutive
week of losses as rising bond yields in Italy triggered
nervousness among investors, while brewing political instability
in Spain also weighed on sentiment.    
    Speculators' bets on the Japanese yen swung to a net short
position of 2,767 contracts.
    The net short position on bitcoin CBOE futures was at 1,659
contracts, down from a net short position of 1,874 contracts the
previous week, the data showed.
    Japanese Yen (Contracts of 12,500,000 yen) 
 $0.312 billion
         May 22, 2018           Prior week
 Long             73,836            64,926
 Short            76,603            61,246
 Net              -2,767             3,680
EURO (Contracts of 125,000 euros)
 $-16.157 billion
         May 22, 2018           Prior week
 Long            225,960           219,317
 Short           116,216           104,203
 Net             109,744           115,114
POUND STERLING (Contracts of 62,500 pounds sterling)
 $-0.479 billion
         May 22, 2018          Prior week
 Long             56,329           61,361
 Short            50,628           55,740
 Net               5,701            5,621
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $4.699 billion
         May 22, 2018          Prior week
 Long             25,386           25,724
 Short            62,697           62,117
 Net             -37,311          -36,393
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $2.045 billion
         May 22, 2018          Prior week
 Long             23,555           30,419
 Short            49,767           54,075
 Net             -26,212          -23,656
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $1.599 billion 
         May 22, 2018          Prior week
 Long             56,063           72,514
 Short            77,175           95,620
 Net             -21,112          -23,106
MEXICAN PESO (Contracts of 500,000 pesos)
 $-0.798 billion
         May 22, 2018          Prior week
 Long             78,769           86,288
 Short            47,229           33,510
 Net              31,540           52,778
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $0.094 billion 
         May 22, 2018          Prior week
 Long             27,077           28,754
 Short            28,440           26,801
 Net              -1,363            1,953

 (Additional reporting by Richard Leong
Editing by Alistair Bell)
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