Speculators' net long dollar position was little changed this week from the previous week, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $34.61 billion in the week ended May 28, compared with $34.76 billion in the previous week. The US speculative community has been net long dollars since mid-July last year.
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 broader 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 $31.33 billion in the week ended May 28, compared with $30.85 billion the previous week.
The US dollar so far this year has held up well, up 1.6 percent amid trade fights with China and now Mexico. Investors bought the US dollar in a flight to safety move, with Japanese yen and Swiss franc, also garnering bids. Analysts said the escalating trade war could slow US growth, dampen inflation, and trigger a sizable global stock market correction and global profits recession. The dollar is expected to be major beneficiary from all the turmoil.
"The US dollar is set to benefit from safe-haven inflows despite market speculation that the Federal Reserve could be readying itself for a rate cut in the not too distant future," said Jane Foley, senior FX strategist, at Rabobank in London.
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