Currency speculators pared bets against the US dollar in the latest week, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net short position fell to $8.86 billion in the week ended January 29, from shorts of $13.26 billion the previous week. It was the eighth straight week of net short bets on 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.
Bets on the euro or longs rose to 27,472 contracts this week from 21,381 previously. "A rising net long euro position ... suggests that investors remain biased toward further upside as euro heads toward levels not seen since late 2011," said Camilla Sutton, chief currency strategist, at Scotia Capital in Toronto. She added that the euro position was balanced, which reduces the risk of a rapid unwinding. Yen shorts, meanwhile, rose in the latest week, with 71,246 contracts from shorts of 64,068 the previous week.
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