Speculators further slashed bullish bets on the US dollar in the latest week, with net longs falling to their lowest since early November, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's net long position dropped to $30.39 billion in the week ended December 15, from $41.22 billion the previous week. Speculators have trimmed their net long position on the dollar for a third straight week. It was the first time in five weeks that net long dollars came in under $40 billion.
Investors had reduced their net long dollar positioning ahead of the outcome of the Federal Reserve meeting last Wednesday, in which the Fed raised interest rates by 25 basis points for the first time in nine years. Some had pared back their net long dollars before the meeting due to the uncertainty about the number of US interest rate increases. The Fed had said on Wednesday that it would be a gradual path to tightening, which in a way diminishes the allure of the greenback.
On the year so far, the dollar had risen 9.3 percent, rising for a third consecutive year. In other contracts, speculators trimmed bearish bets on the euro, as net shorts were reduced to their lowest in about four weeks. This week's net short euro contracts were 159,961, compared with 172,331 contracts the week before. Net short euro contracts have been steadily declining especially in the wake of the European Central Bank's announcement two weeks ago of a stimulus package announced that were below market expectations. On the year so far, the euro was down 10.2 percent against the dollar. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, sterling, Swiss franc and Canadian and Australian dollars.
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