Speculators reduced their net long US dollar bets in the latest week to the lowest level in about six weeks, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $33.58 billion in the week ended May 14, compared with $38.08 in the previous week. US net long dollars declined for a second straight week.
US dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese 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 greenback posted a net long position of $29.73 billion in the week of May 14, compared with $34.34 billion the previous week.
The dollar has started to falter again the last two weeks with a re-escalation of US-China trade tensions and an uneven batch of US economic data such as this week's poor retail sales number. Kathy Lien, managing director of FX Strategy at BK Asset Management in New York, said weak US numbers alone "should make investors worried but when they are combined with trade tensions, investors need to be wary of a further slowdown over the next three to six months."
US President Donald Trump early last week slammed China's trade practices, citing billions in US losses as it threatened to increase tariffs on $200 billion worth of imports from China. China struck a more aggressive tone on Friday, capping a week in which Beijing unveiled fresh retaliatory tariffs, US officials accused China of backtracking on promises made during months of talks, and the Trump administration leveled a potentially crippling blow against one of China's biggest and most successful companies. So far this year, the dollar index was still up 1.9%, but over the last three weeks, it has slipped 0.2%.
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