Speculators' net short dollar bets fell to a seven-week low in the latest week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of the net short dollar positions, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was $15.15 billion in the week to May 1.
That compares with a net short position of $19.77 billion the previous week. To be short a currency means traders believe it will fall in value. 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 $18.32 billion, compared with a short position valued at $23.81 billion a week earlier.
The dollar index, which measures the greenback against a basket of six major currencies, is up 0.5 percent for the year. The index, which started the year on a weak footing, has risen about 4 percent since mid-February. The greenback strengthened as investors bet the Federal Reserve will continue raising rates while other central banks, including the European Central Bank (ECB), will act more slowly.
"The outlook for continued, gradual Fed policy tightening and a much more cautious approach to normalization by other major central banks remains a big part of the dollar's recent rally," Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington D.C., said in a note. On Friday, the dollar index jumped to its highest this year despite disappointing US employment data for April.
Swiss franc net shorts, meanwhile, grew to 19,456 contracts, the most since February, CFTC data showed. Speculators' bets on the Japanese yen swung to a net short position of 1,405 contracts. Speculators' net short position on bitcoin CBOE futures shrank to 1,597 contracts, from 1,829 contracts the previous week, the data showed.