Currency speculators slashed bets against the US dollar by nearly half in the latest week, data from the Commodity Futures Trading Commission showed on Friday. The value of the dollar's net short position fell to $7.38 billion in the week ended January 11 from $12.4 billion the previous week, according to Reuters and CFTC calculations.
The Reuters calculation for the aggregate US dollar position is derived from the net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc, Canadian and Australian dollars. Speculators also raised bets against the euro in the latest week to 45,182 contracts in the wake of persistent stress in the euro zone sovereign debt sector.
However, the CFTC euro short position does not reflect the euro's 3.8 percent recovery this week, its best weekly performance since March 2009. Based on the CFTC positioning, the euro could rally further as investors continue to cover their short position. Speculators also reduced their shorts on sterling to 5,090 contracts. Sterling has also rebounded this week, rising nearly 2 percent, its best weekly gain since late October 2010.
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