Speculators push long U.S. dollar bets to 11-month peak -CFTC, Reuters

(Adds details on dollar, yen, euro contracts, adds comments,

byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Dec 9 (Reuters) - Speculators increased positive

bets on the U.S. dollar for a third straight week, pushing net

longs to their highest since early January.

The value of the dollar's net long position rose to $28.14

billion in the week ended Dec. 6, from $24.82 billion in the

previous week, according to Reuters calculations and data from

the Commodity Futures Trading Commission released on Friday.

The continued rise in long dollar positioning is not a

surprise given expectations of higher inflation with increased

infrastructure spending under a Trump administration.

With (Other OTC: WWTH - news) more upbeat U.S. economic data including a generally

solid U.S. non-farm payrolls report for November, the Federal

Reserve is widely expected to raise interest rates next week.

That expectation has underpinned the dollar for the past several

weeks, with the greenback posting a 3 percent gain so far this

year.

The focus now turns to the number of rate increases the Fed

could signal at the conclusion of the policy meeting on

Wednesday.

"There have actually been widespread improvements in the

U.S. economy with consumer spending up and inflation on the

rise," said Kathy Lien, managing director of FX strategy at BK

Asset Management in New York.

"The dollar will rise if the dot plot shows expectations for

more than two rate hikes in 2017. The last plot had Fed

Presidents looking for 50 basis points of tightening next year."

Net (LSE: 0LN0.L - news) shorts on the yen, meanwhile, rose to their largest

since December last year, at 33,937 contracts. Speculators

turned net short the yen last week after months of being long.

The yen has been engulfed in a Trump-inspired dollar rally.

The longer-term rate differentials between the U.S. and Japan

10-year notes continue to widen at more than 200 basis points,

the largest gap in favor of the U.S. dollar since 2010 and

supporting further gains in the greenback against the yen.

Euro short contracts, on the other hand, fell to 114,556,

their lowest since mid-October.

The euro retains a weak tone against the dollar after

Thursday's steep fall in the wake of the European Central Bank's

decision to extend its quantitative easing by nine months.

"Heavy losses yesterday and no real bounce into the end of

the week suggest euro/dollar may be on the cusp of another

biggish shunt lower," said Shaun Osborne, chief FX strategist,

at Scotiabank in Toronto.

The Reuters calculation for the aggregate U.S. dollar

position is derived from net positions of International Monetary

Market speculators in the yen, euro, sterling, Swiss franc and

Canadian and Australian dollars.

Japanese Yen (Contracts of 12,500,000 yen)

$3.722 billion

06 Dec 2016 Prior week

week

Long 74,367 72,124

Short 108,304 72,393

Net -33,937 -269

EURO (Contracts of 125,000 euros)

$15.346 billion

06 Dec 2016 Prior week

week

Long 123,390 136,108

Short 237,946 255,348

Net -114,556 -119,240

POUND STERLING (Contracts of 62,500 pounds sterling)

$6.119 billion

06 Dec 2016 Prior week

week

Long 43,169 50,806

Short 120,407 128,941

Net -77,238 -78,135

SWISS FRANC (Contracts of 125,000 Swiss francs)

$3.143 billion

06 Dec 2016 Prior week

week

Long 9,859 13,027

Short 35,256 37,361

Net -25,397 -24,334

CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)

$1.368 billion

06 Dec 2016 Prior week

week

Long 21,538 25,010

Short 39,696 43,586

Net -18,158 -18,576

AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)

$-1.557 billion

06 Dec 2016 Prior week

week

Long 48,274 54,791

Short 27,403 33,834

Net 20,871 20,957

MEXICAN PESO (Contracts of 500,000 pesos)

$1.326 billion

06 Dec 2016 Prior week

week

Long 18,619 19,314

Short 72,685 73,814

Net -54,066 -54,500

NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)

$0.281 billion

06 Dec 2016 Prior week

week

Long 27,641 30,231

Short 31,593 32,103

Net -3,952 -1,872

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Brown

and Andrew Hay)