Speculators cut net US dollar longs to lowest since week of Oct 20: CFTC

FEB 6, 20167:35 AM

[NEW YORK] Speculators slashed bullish bets on the US dollar for a sixth straight week, as net longs fell to their lowest level since roughly the third week of October, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.

The value of the dollar's net long position dropped to US$18.20 billion in the week ended Feb 2, from US$23.85 billion in the previous week. It was the first time in 15 weeks that net dollar longs came in below US$20 billion.

Speculators have been reducing their stash of dollar longs, concerned that external market stress caused by a slowdown in China and the decline in oil prices could further slow the Federal Reserve's gradual tightening policy. That would be a negative scenario for the dollar.

The dollar index is down 1.7 per cent so far this year.

Speculators also reduced net shorts on the euro to the lowest level since late October. This week net euro short contracts totaled 87,073 contracts from 127,215 the previous week.

Net long positions on the yen, meanwhile, fell to 37,245 contracts, from 50,026 the week before.

The outlook on the yen has been negatively affected after the Bank of Japan last week took one of its main interest rates into negative territory.

The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, sterling, Swiss franc and Canadian and Australian dollars.

REUTERS