Speculators raised their bullish bets on the US dollar for a third straight week to their highest in about 15 months, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position surged to $35.88 billion in the week ended September 2, from $32.92 billion previously. This week's net long contracts in the US dollar were the biggest since the week of June 4, 2013.
To be long a currency is to take a view it will rise, while being short is a bet its value will decline. Net shorts on the euro were also huge in the latest week, rising to their largest in more than two years, with 161,423 contracts. This is expected to balloon further next week as traders price in the European Central Bank's surprise interest rate cut on Thursday, which dragged the euro below $1.30. Net shorts on the Japanese yen were also substantial at 117,308 contracts, the highest since mid-January. 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 and Canadian and Australian dollars.