Currency speculators increased their bets in favour of the US dollar in the latest week, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position rose to $17.63 billion in the week ended December 20, from $16.32 billion the previous week.
To be short a currency is to bet it will decline in value, while being long is a view its value will rise. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc, Canadian and Australian dollars.
The dollar on Friday was on track to end the week lower against a currency basket, with further losses likely next week as portfolio managers re-balance their portfolios for the year-end after gains in US assets. Since US stocks and Treasuries rose this year, the amount of dollars asset managers hold has increased relative to their benchmarks. As a result, they would have to sell dollars to balance their portfolios as the year winds down, analysts said.