Currency speculators decreased bets in favour of the US dollar to the lowest in six weeks in the latest week, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position fell to $8.92 billion in the week ended October 25, the lowest since the week ended September 13. Net long dollar positions stood at $14.86 billion a week earlier.
Speculators doubled their bets in favour of the Japanese yen to 54,279 contracts in the latest week, the highest since the beginning of August. The positioning shift came as the yen repeatedly strengthened to record highs against the US dollar, with traders testing the resolve of Japanese financial authorities to launched renewed intervention efforts to weaken their currency.
The dollar hit an all-time low of 75.661 yen on electronic trading platform EBS on Thursday. Short euro bets were little changed going into this week's summit of European leaders, but they likely have since declined sharply after a long-awaited agreement struck on Thursday to contain the debt crisis sparked a strong short-covering rally and pushed the euro to a seven-week high against the dollar.
To be short a currency is to bet it will decline in value, while being long is a view its value will rise. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc, Canadian and Australian dollars.
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