Speculators raised their net long bets on the US dollar to a new 2019 high in the latest week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $29.48 billion in the week ended March 19, up slightly from $29.34 billion in the previous week. The net long dollar position is the highest since late December.
To be long a currency means traders believe it will rise in value, while being short points to a bearish bias. The speculative market has been long on the dollar since mid-June of last year.
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 valued at $25.12 billion, down from a net long position valued at $26.34 billion a week earlier.
On Friday, the dollar fell against the safe-haven Japanese yen as dismal US manufacturing data fueled worries about the wider economy, and Treasury bond yields signaled growing fears of a recession.
For the week, the dollar index, which measures the greenback against six major currencies, was little changed. The index, which fell on Wednesday after the Federal Reserve surprised investors by abandoning its projections for any interest rate hikes this year, found some relief from a weaker euro.
Policymakers had cut growth forecasts for the euro zone economy earlier this month and launched a new round of cheap loans to banks, putting pressure on the euro. Weak factory data out of Germany on Friday raised concerns the German economy, Europe's powerhouse, may be slowing quickly.
"The dollar is likely to weaken in coming months," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
"It's just benefiting right now as it wins the sort of reverse beauty contest that often plays out in FX markets," he said. In the cryptocurrency market, speculators' net short position on bitcoin Cboe futures further fell to 1,286 contracts in the week ended March 19, from 1,331 short contracts the previous week.
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