Speculators' net long bets on the US dollar fell to the lowest since mid-July, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $19.16 billion in the week ended Sept. 11, down from $20.60 billion the previous week. Speculators have been net long dollars for 13 straight weeks, after being net short for 48 consecutive weeks.
Net long US dollar positioning has also declined for three straight weeks.
US dollar positioning was derived from net contracts of International Monetary Market speculators in the 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 US dollar posted a net long position of $20.796 billion in the week ended Sept. 11, from $22.14 billion a week earlier.
Investors continued to pare back extreme long dollar positioning that in recent weeks had hit the highest since January 2017.
The dollar had benefited from expectations of higher interest rates as well as the escalation of global trade tensions involving the United States, China, Canada and the European Union.
But easing trade tensions between China and the United States as well as encouraging developments between Britain and the European Union on the terms for Britain's exit from the economic bloc has reduced safe-haven demand for the dollar.
Since mid-August, the dollar index has declined 2.7 percent.
Bloomberg reported on Friday though that US President Donald Trump has instructed aides to proceed with tariffs on about $200 billion more in Chinese products, despite Treasury Secretary Steven Mnuchin's attempts to restart talks with China about resolving the trade war.
That has boosted the dollar index on Friday, trading up 0.5 percent on the day at 94.954.
The CFTC report also showed that the major positioning changes were in the euro, with net longs increasing; sterling, whose net shorts fell; and the Swiss franc, with its net short also declining.
In the cryptocurrency market, speculators' net short position on bitcoin Cboe futures dropped to a record low of -1,239 contracts from net shorts of -1,368 contracts the previous week, data showed.
Bitcoin on Friday rose 0.7 percent to $6,528.71 on the Bitstamp platform. It cleared the $7,000 hurdle in late August, but has since declined from that level.
So far this year bitcoin has plunged 53 percent, after soaring more than 1,300 percent in 2017.
Nigel Green, founder and chief executive officer of deVere Group, which launched a cryptocurrency exchange, said the broader crypto market remains in bear territory. He added that investors should look at the bigger picture and see potential buying opportunities in other digital currencies.
"There's no doubt in my mind that in today's digitalized, globalized world, the demand for digital, global currencies in some form - whether it be the biggest ones of today or not - is only set to grow," Green said.
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