Speculators' net short dollar bets rose in the latest week to their largest amount since mid-October, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of the net short dollar position, derived from net holdings of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was $11.47 billion, in the week to January 23.
The previous week's net short position on the dollar was $9.59 billion. In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the US dollar posted a net short position valued at $14.458 billion, compared with $11.80 billion the week before.
Net short US dollar contracts have increased for four straight weeks, underscoring bearish sentiment on the greenback despite the prospect of higher US interest rates this year. Other major central banks, such as the European Central Bank, have been normalizing their monetary policies, boosting their currencies, specifically against the dollar.
It has been a choppy week for the dollar after US Treasury Secretary Steve Mnuchin commented that a weak currency is good for the United States, only to backtrack after the greenback fell sharply. President Donald Trump did his own damage control, saying that the government still supports a strong dollar.
"If you take the overall stance of the US administration, it's protectionist and still it's not clear what kind of dollar the president and the Treasury want, but it still doesn't sound like they really want a strong dollar given the fact that they are aiming to boost exports," said Vassili Serebriakov, currency strategist at Credit Agricole in New York.
"Ultimately when you think about the dollar, it's still in a downtrend," he said. "I don't think it changes the overall picture very much. It's still in a downtrend." Speculators, meanwhile, pared back net short positions on bitcoin futures traded on CBOE Global Markets to 1,746 contracts this week, from a record high of 2,226 the previous week, CFTC data showed.
Digital currency bitcoin has been on a highly volatile track in the last few months. After hitting an all-time high just shy of $20,000 on December 17 on the Bitstamp platform, it plunged more than 50 percent in roughly a month to below $10,000. Bitcoin has stabilized since then and was last down more than 2 percent at $10,915.77.