Speculators' net short dollar bets grew to a four-week high this week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of the net short dollar position was $11.46 billion in the week to March 6, compared with net shorts of $11.29 billion the previous week. Net short positioning on the greenback has increased for a second straight week.
US dollar positioning was derived from net contracts of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars. 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 rouble, the US dollar posted a net short position valued at $14.11 billion, down from $14.51 billion the week before.
The dollar was once again on the defensive this past week amid concerns about the impact of hefty US tariffs on steel and aluminium on the US economy. President Donald Trump, however, exempted Mexico and Canada, two of the United States' major trading partners, minimizing the impact on the dollar. The US currency managed to hold some gains of 0.3 percent over the last two weeks though, compared with a nearly 1 percent gain during the previous two weeks. But so far this year, the dollar index was down 2.2 percent
"Mr. Trump's bark appears to have been much worse than his bite, and when the policy is finally enacted it may have more of a theatrical effect rather than an economic one," said Boris Schlossberg, managing director of FX strategy, at BK Asset Management. Meanwhile, speculators' net short position on bitcoin Cboe futures fell to 1,599 contracts, down from a net short position of 1,833 contracts in the prior week, the data showed. Bitcoin was last down 2.5 percent at $9,055.04 on the Luxembourg-based exchange Bitstamp.
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