NEW YORK: Speculators' net bearish bets on the US dollar grew in the latest week to the largest bearish position since May 2011, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday. The value of the net short dollar position was $32.12 billion for the week ended Aug. 11, compared with a net short position of $28.94 billion for the week before that.
US dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound, Swiss franc and Canadian and Australian dollars. Traders who are long on a currency believe it will rise in value, while being short points to a bearish bias.
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 of $32.23 billion, up from a net short position of $28.87 billion a week earlier.
On Friday, the dollar edged lower, putting it on pace for eight straight weeks of losses, as investors continued to shun it and looked to other currencies whose economies are currently outperforming that of the United States in terms of managing the coronavirus pandemic.
Growing faith in Europe's rebound and concern about the US response as the coronavirus spreads and politicians remain deadlocked over the next relief package have in recent weeks bolstered the euro against the dollar.
The prospects for a deal in the US Congress to help Americans suffering due to the coronavirus pandemic dimmed on Friday, with the Senate and House of Representatives in recess and no fresh talks scheduled with President Donald Trump's negotiators. The delay in the passage of additional US stimulus for virus relief added pressure on the greenback.
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