Currency speculators' bets in favour of the US dollar swelled to their highest level in nine months in the latest week, according to data released by the Commodity Futures Trading Commission on Friday. The value of the dollar's net long position rose to $26.3 billion in the week ended April 2, just shy of that seen in the week ending July 17, 2012, according to Reuters calculations.
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. Much of the dollar's gain came at the expense of the euro. Speculators' short euro position increased to its largest since last November. Worries about Europe's struggling economy and the fallout from the Cyprus bank bailout have weighed on the euro.
Speculators' cut their bets against the yen, though analysts said that was likely to change next week after the Bank of Japan said it would pump about $1.4 trillion into the economy in less than two years in an attempt to end decades of stagnation. The yen extended a steep decline after the Bank of Japan's April 4 statement, hitting a 3-1/2-year low against the dollar. The latest CFTC data captured positions as of April 2, two days before Japan announced its stimulus plans. To be long is a view its value will rise while being short a currency is to bet it will decline in value.