U.S. dollar net longs slide to five-week low -CFTC, Reuters data

FILE PHOTO: Dollar banknote seen through broken glass in this illustration
FILE PHOTO: One U.S. dollar banknote is pictured through broken glass in this illustration taken June 25, 2021. REUTERS/Dado Ruvic/Illustration

November 5, 2021

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -Speculators’ net long bets on the U.S. dollar fell to their lowest level since late September, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.

The value of the net long dollar position was $19.51 billion for the week ended Nov. 2, down from net longs of $20.07 billion in the previous week. U.S. dollar net long positioning has declined for four straight weeks.

U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound, Swiss franc, and Canadian and Australian dollars.

In a wider measure of dollar positioning, which includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian rouble, the greenback posted a net long position of $19.303 billion this week, slightly down from $19.75 billion in the prior week.

“Investors trimmed their bullish bets on the U.S. dollar … ahead of the Federal Reserve’s policy decision on Wednesday,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

But he noted that the dollar’s net long positioning remained fairly substantial, which “reflects solid bullish sentiment in the greenback as markets look to the beginning of the Fed’s hiking cycle.”

The dollar, however, fell on Wednesday as the Fed’s policy statement was viewed as dovish by market participants.

The Fed did announce a reduction of asset purchases to be implemented later this month, but it stuck to its long-held view that the surge in inflation is transitory.

The dollar index ended the week little changed, as losses seen after the Fed statement were offset by gains following a strong U.S. job report for October.

On the year, the dollar has gained 4.7%.

The euro, meanwhile, saw a sharp reduction in net shorts to -6,138 contracts, equivalent to nearly $900 million. Also this week, European Central Bank President Christine Lagarde pushed back against market bets that price pressures would trigger an interest rate hike as soon as next year.

Europe’s single currency has so far been a laggard this year, down 5.3% in 2021.

In cryptocurrencies, bitcoin net shorts narrowed to -1,612 contracts this week, from a record -4,412 contracts the previous week.

Since hitting an all-time peak of $67,016.50 on Oct. 20, bitcoin has fallen 8.3%.

That said, continued optimism remains about bitcoin amid news on cryptocurrency adoption by banks, growth of nonfungible tokens on virtual gaming platforms, and launch of bitcoin futures-based U.S. exchange-traded funds.

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

$11.806 billion

02 Nov 2021 Prior week

week

Long 20,337 31,487

Short 127,961 138,523

Net -107,624 -107,036

EURO (Contracts of 125,000 euros)

$0.888 billion

02 Nov 2021 Prior week

week

Long 191,496 196,880

Short 197,634 208,136

Net -6,138 -11,256

POUND STERLING (Contracts of 62,500 pounds sterling)

$-1.28 billion

02 Nov 2021 Prior week

week

Long 57,255 51,912

Short 42,208 36,959

Net 15,047 14,953

SWISS FRANC (Contracts of 125,000 Swiss francs)

$2.823 billion

02 Nov 2021 Prior week

week

Long 1,439 1,246

Short 22,087 20,625

Net -20,648 -19,379

CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)

$-0.335 billion

02 Nov 2021 Prior week

week

Long 42,037 45,977

Short 37,875 42,657

Net 4,162 3,320

AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)

$5.608 billion

02 Nov 2021 Prior week

week

Long 19,187 17,448

Short 94,683 92,694

Net -75,496 -75,246

MEXICAN PESO (Contracts of 500,000 pesos)

$1.228 billion

02 Nov 2021 Prior week

week

Long 61,553 63,677

Short 112,571 106,966

Net -51,018 -43,289

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

$-0.985 billion

02 Nov 2021 Prior week

week

Long 27,504 24,490

Short 13,643 15,584

Net 13,861 8,906

(Reporting by Gertrude Chavez-Dreyfuss in New YorkEditing by Rosalba O’Brien and Matthew Lewis)