NEW YORK: Speculators cut their net short dollar positions in the latest week to the lowest since mid-November, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday.
The value of the net short dollar position fell to $22.29 billion in the period ended March 9, the smallest short position since Nov. 17, compared with a net short of $27.80 billion the previous week.
US dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound and 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 rouble, the US dollar posted a net short position of $23.11 billion, compared with a net short of $28.71 billion a week earlier.
The dollar index has risen modestly this year - up approximately 1.8% - but has fallen in the past week as the selloff in Treasury debt has abated slightly.
The rise in Treasury yields was partly attributable to expectations of increasing inflationary pressures after the passage of President Joe Biden’s $1.9 trillion stimulus package. The Fed is expected to update their inflation forecasts at next week’s policy meeting, but for now, are not expected to adjust policy.
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