Speculators reduced bullish bets on the US dollar for a fourth straight week, as net longs fell to their lowest level since late October, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position slid to $25.03 billion in the week ended January 19, from $25.29 billion in the previous week. This was the third straight week that net dollar longs came in below $30 billion.
The volatility in financial markets driven by the downtrend in oil has diminished the allure of the dollar against both the euro and yen, which have lower interest rates than the US currency. Against the yen, the dollar has been down 1.2 percent so far in January. Against the euro, the dollar was still up 0.6 percent thus far, but it was nearly 2 percent lower in the first two weeks of the year.
This week, Japanese yen net longs totalled 37,653 contracts, from 25,266 previously. This week's yen net longs were the largest since mid-February 2012. Speculators also reduced net shorts on the euro to the lowest since early November. This week net euro short contracts totalled 137,015 contracts, from 146,451 the previous week. These days, the safe haven yen and low-yielding euro tend to struggle in times of increased risk appetite because these currencies are often used to fund investment in risky assets.
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