Speculators raised their net long bets on the US dollar to the highest since December 2015 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 $38.88 billion in the week to April 30, up from $37.21 billion the previous week. 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 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 broader 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 $34.92 billion in the week to April 30, compared with $32.59 billion the previous week. The dollar has held its own against most major currencies in recent months with analysts attributing the greenback's strength to improving US economic data, especially relative to how other major economies are faring.
The US Federal Reserve on Wednesday held interest rates steady and signalled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth and the likelihood that weak inflation will edge higher. On Friday, the dollar slipped against a basket of currencies as traders focused on the weaker aspects of the April US payrolls report, brushing aside stronger-than-forecast hiring and a drop in the jobless rate to the lowest in more than 49 years.
"Despite its pull-back today, we forecast that the greenback will appreciate further this year, even as rates fall by more in the US than investors are anticipating," John Higgins, chief market economist at Capital Economics, said in a note. In the cryptocurrency market, speculators' net short position on bitcoin Cboe futures shrank to 1,043 contracts in the week ended April 30, from a short position of 1,143 contracts the previous week. Bitcoin has risen by more than 50% this year, helped by speculation that the cryptocurrency may be ripe for a rebound after losing more than 70% of its value in 2018. On Friday, bitcoin was 5.6% higher at $5,688.76 on the Bitstamp platform.
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