Speculators' net long dollar position rose to its highest level since late June, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position totalled $18.70 billion in the week ended July 30, compared with $15.32 billion in the previous week. US net long dollars rose for a second straight week.
US 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 that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net long position of $14.781 billion in the week ended July 30, compared with $11.504 billion the previous week.
Net long US dollar positioning was helped by solid economic data last week. Data showed last Wednesday that US gross domestic product grew at a 2.1% annualized rate in the second quarter, compared with an unrevised 3.1% pace in the first quarter. Economists polled by Reuters had forecast GDP rising at just a 1.8% rate in the second quarter.
The Fed eventually cut interest rates on Wednesday by a quarter of a percentage point, but analysts said its statement as well as comments from Fed Chairman Jerome Powell were not dovish enough to expect an aggressive tightening plan. The dollar also benefited from the euro's woes as the European Central Bank vowed to undertake active monetary policy easing to shore up the region's slumping economy. Over the last two weeks, the dollar index has gained 1.2%.
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