Speculators pare back long U.S. dollar bets for 2nd straight week-CFTC, Reuters
(Adds details on dollar and Mexican peso contracts, analyst
comments, table, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 20 (Reuters) - Speculators reduced long bets
on the U.S. dollar for a second straight week, as investors
continued to pare back overextended positions on the greenback
and worried about U.S. President Donald Trump's trade and
currency policies.
The value of the dollar's net long position was $24.44
billion in the week ended Jan. 17, from $24.95 billion the
previous week, according to data from the Commodity Futures
Trading Commission released on Friday and calculations by
Reuters.
After a sharp rally following Trump's victory in November
that saw a 3 percent surge for the month, the dollar has come
back down to earth, undermined by uncertainty surrounding the
new president's policies, specifically a stimulus plan that was
promised during his campaign.
The dollar had rallied the last two months on the back of
Trump's campaign promises of fiscal stimulus and tax cuts, but
that rally ran out of steam in the run-up to Trump's
inauguration.
For the month of January, the dollar index has fallen 1.3
percent so far, on track for its weakest monthly performance
since March last year.
"If the dollar continues to weaken, we're rapidly running
out of room and dollar bulls may be forced into a full-fledged
capitulation, which has yet to take place at current levels,"
said John Hardy, head of forex strategy at Saxo Bank, in
Copenhagen.
"If the dollar firms, on the other hand, the gains could
come quickly as frustrated bulls have been without a case,
ironically since the Fed's rate hike in December, which marked
the end of the most recent dollar advance," he added.
Net (LSE: 0LN0.L - news) short contracts on the Mexican peso, meanwhile, rose in
the latest week to 73,321, the largest since early October.
The peso has been the most vulnerable to comments from
Trump. His persistent attacks on Mexico over immigration and
jobs taken from Americans have damaged the peso, which fell to a
record low against the dollar this week.
"The outlook for the peso remains bearish amid elevated
economic uncertainty," said Joe Manimbo of Western Union
Business Solutions in Washington.
"The peso's deteriorating value keeps pressure on Mexico's
central bank to conduct dollar-weakening, peso-supportive forex
intervention."
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)
$8.639 billion
17 Jan 2017 Prior week
week
Long 28,560 26,041
Short 106,390 105,880
Net -77,830 -79,839
EURO (Contracts of 125,000 euros)
$8.904 billion
17 Jan 2017 Prior week
week
Long 128,846 134,747
Short 195,346 200,570
Net -66,500 -65,823
POUND STERLING (Contracts of 62,500 pounds sterling)
$5.139 billion
17 Jan 2017 Prior week
week
Long 55,242 56,742
Short 121,484 122,573
Net -66,242 -65,831
SWISS FRANC (Contracts of 125,000 Swiss francs)
$1.709 billion
17 Jan 2017 Prior week
week
Long 7,166 10,012
Short 20,849 24,258
Net -13,683 -14,246
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
$0.418 billion
17 Jan 2017 Prior week
week
Long 32,064 28,405
Short 37,520 36,340
Net -5,456 -7,935
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
$-0.367 billion
17 Jan 2017 Prior week
week
Long 42,401 40,782
Short 37,556 44,630
Net 4,845 -3,848
MEXICAN PESO (Contracts of 500,000 pesos)
$1.705 billion
17 Jan 2017 Prior week
week
Long 22,573 23,878
Short 95,894 95,654
Net -73,321 -71,776
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
$0.886 billion
17 Jan 2017 Prior week
week
Long 25,517 22,989
Short 37,805 36,949
Net -12,288 -13,960
(Reporting by Gertrude Chavez-Dreyfuss, editing by G Crosse and
Tom Brown)