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Speculators cut net U.S. dollar longs in latest week -CFTC, Reuters
(Adds table, comment, byline, details on dollar, euro, Mexican
peso contracts)
By Gertrude Chavez-Dreyfuss
Jan 13 (Reuters) - Speculators pared back net long bets on
the U.S. dollar in the latest week, as investors reduced
positions that have become overextended due to a rally inspired
by Donald Trump's victory in the U.S. presidential election two
months ago.
The value of the dollar's net long position was $24.95
billion in the week ended Jan. 10, from $25.43 billion the
previous week, according to data from the Commodity Futures
Trading Commission and calculations by Reuters.
The dollar this week posted its worst weekly performance
since November as the positive effect of Trump on the market
seems to be fading. At Wednesday's first press briefing before
his inauguration next week, Trump failed to provide details on
his much-touted fiscal stimulus plan of increased infrastructure
spending and tax cuts. That disappointed stock and dollar bulls
that had rallied on those themes.
The dollar struggled as a result, but market participants
said the currency's downdraft was temporary.
"We do expect a return of dollar strength, with next week
possibly providing the pivot point," said John Hardy, head of FX
strategy, at Saxo Bank in Copenhagen.
"We move toward Donald Trump's inauguration on Friday as we
still anticipate the Fed may hike again...already in March as
Trump moves forward with an aggressive stimulus program. That
will bring U.S. rates higher."
Net (LSE: 0LN0.L - news) short contracts on the euro, meanwhile, fell to 65,823,
the lowest level since late June. The outlook on the euro,
however, remained less upbeat than the dollar.
The European Central Bank is still doing massive
quantitative easing and the region still faces considerable
political risks.
Next (Frankfurt: 779551 - news) week will be crucial for the euro as the ECB meets and
its president Mario Draghi holds a press conference. ECB minutes
showed that the December meeting's decision to extend
quantitative easing to the end of the year was met with some
resistance by a few ECB members.
The Mexican peso short contracts, on the other hand, rose in
the latest week to 71,776, the largest since early October. The
peso has been the most sensitive to comments from Trump. His
continued assault on Mexico in terms of immigration jobs has
damaged the peso, which has fallen to record low.
The Reuters calculation for the aggregate U.S. dollar
position is derived from net positions of International Monetary
speculators in the yen, euro, British pound, Swiss franc and
Canadian and Australian dollars.
Japanese Yen (Contracts of 12,500,000 yen)
$8.621 billion
10 Jan 2017 Prior week
week
Long 26,041 37,962
Short 105,880 124,726
Net -79,839 -86,764
EURO (Contracts of 125,000 euros)
$8.683 billion
10 Jan 2017 Prior week
week
Long 134,747 129,701
Short 200,570 199,757
Net -65,823 -70,056
POUND STERLING (Contracts of 62,500 pounds sterling)
$5.01 billion
10 Jan 2017 Prior week
week
Long 56,742 55,482
Short 122,573 120,224
Net -65,831 -64,742
SWISS FRANC (Contracts of 125,000 Swiss francs)
$1.752 billion
10 Jan 2017 Prior week
week
Long 10,012 11,813
Short 24,258 25,252
Net -14,246 -13,439
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
$0.6 billion
10 Jan 2017 Prior week
week
Long 28,405 39,546
Short 36,340 43,417
Net -7,935 -3,871
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
$0.283 billion
10 Jan 2017 Prior week
week
Long 40,782 47,948
Short 44,630 51,204
Net -3,848 -3,256
MEXICAN PESO (Contracts of 500,000 pesos)
$1.646 billion
10 Jan 2017 Prior week
week
Long 23,878 22,279
Short 95,654 87,915
Net -71,776 -65,636
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
$0.976 billion
10 Jan 2017 Prior week
week
Long 22,989 25,522
Short 36,949 36,935
Net -13,960 -11,413
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu
Nomiyama and Lisa Shumaker)
