NEW YORK: US dollar net shorts slipped for a second straight week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of net short dollar position hit $32.67 billion in the week ended Sept. 8, from net shorts of $32.83 billion the previous week. US net shorts hit a more than nine-year high of $33.68 billion in late August.
The speculative community has been short the dollar since mid-March. US dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound, Swiss franc as well as the Canadian and Australian dollars.
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 of $32.988 billion, compared with net shorts of $34.07 billion the week before. The US dollar has made some recovery the last few weeks. Since the beginning of September, the dollar has gained about 2% against a basket of currencies.
One of the reasons for the dollar's rebound has been concerns about a strong euro from European Central Bank officials such as chief economist Philip Lane. Those concerns, however, were eased after ECB President Christine Lagarde on Thursday said the bank does not target exchange rates.
However, analysts said there seems to be a ceiling on the euro with which the ECB is willing to work with. "I think the ECB is okay with the $1.18 level, but not $1.20," said Juan Perez, currency trader, at Tempus Inc. in Washington. Net euro longs, meanwhile, edged up to 196,814 contracts this week. It hit an all time high of more 200,000 net long contracts a few weeks ago.
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