July 28, 2017 / 8:21 PM / a year ago

UPDATE 1-Speculators increase U.S. dollar net short bets -CFTC, Reuters

 (Adds details on dollar positioning, analyst quote, data,
paragraphs 4-9; adds table)
    By Dion Rabouin
    NEW YORK, July 28 (Reuters) - Speculators increased their
short bets against the U.S. dollar this week, as political
uncertainty and reduced expectations for accelerated monetary
policy tightening from the Federal Reserve have reversed
positioning on the greenback.
    The value of net short bets against the dollar rose to $3.92
billion in the week ending July 25, according to calculations by
Reuters and Commodity Futures Trading Commission data released
on Friday. That was up from last week's $1.91 billion, which was
the first week of net short bets on the dollar in more than a
    Speculators raised net long bets on the Canadian dollar and
the Mexican peso. Long contracts on the loonie rose to their
highest since March while long bets on the Mexican peso hit
their highest level since May 2013.
    To be long a currency means investors believe it will
increase in value, while being short a currency is a bet that
its value will fall.
    Analysts said they expected further dollar weakness in light
of the continued uncertainty from Washington and the dollar's
outperformance over the past few years.
    "I don’t know about the short term, but medium term the
dollar has to weaken substantially more than it is right now,"
said Axel Merk, president and portfolio manager at Merk Hard
Currency Fund in Palo Alto, California.
    Merk said he expected interest rates to continue higher in
France and Germany while they remain on pause in the United
States, making the dollar a less attractive currency for
speculators to hold.
    In a wider measure of dollar positioning that includes net
futures contracts in the New Zealand dollar, Mexican peso,
Brazilian real and Russian ruble, the U.S. dollar posted a net
short position valued at $9.55 billion, the largest since
February 2013.    
    The Reuters calculation for the aggregate U.S. dollar
position is derived from net positions of International Monetary
speculators in the yen, euro, British pound, Swiss franc and
Canadian and Australian dollars.
Japanese Yen (Contracts of 12,500,000 yen) 
 $13.574 billion
         25 Jul 2017            Prior week
 Long             28,018            37,419
 Short           149,507           164,338
 Net            -121,489          -126,919
EURO (Contracts of 125,000 euros)
 $-13.23 billion
         25 Jul 2017            Prior week
 Long            197,656           199,540
 Short           106,814           108,219
 Net              90,842            91,321
POUND STERLING (Contracts of 62,500 pounds sterling)
 $2.132 billion
         25 Jul 2017           Prior week
 Long             52,152           50,883
 Short            78,349           67,356
 Net             -26,197          -16,473
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $0.203 billion
         25 Jul 2017           Prior week
 Long             14,893           13,832
 Short            16,443           17,499
 Net              -1,550           -3,667
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $-2.128 billion
         25 Jul 2017           Prior week
 Long             70,385           60,000
 Short            43,772           51,957
 Net              26,613            8,043
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-4.474 billion 
         25 Jul 2017           Prior week
 Long             80,799           69,075
 Short            24,425           17,719
 Net              56,374           51,356
MEXICAN PESO (Contracts of 500,000 pesos)
 $-3.176 billion
         25 Jul 2017           Prior week
 Long            130,075          130,155
 Short            17,185           17,616
 Net             112,890          112,539
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $-2.581 billion 
         25 Jul 2017           Prior week
 Long             41,221           44,257
 Short             6,416            8,276
 Net              34,805           35,981
 (Reporting by Dion Rabouin; Editing by David Gregorio)
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