Speculators reduced bullish bets on the US dollar in the latest week, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position slipped to $41.22 billion in the week ended December 8, from $43.47 billion the previous week. Speculators have trimmed their net long position on the dollar for a second straight week.
The US dollar index has risen more than 8.0 percent so far in 2015, boosted all year by expectations that the Federal Reserve would be the first major central bank to raise interest rates this year. In fact, markets have fully priced in a lift-off next week, and the only issue being debated is the number of rate increases over the next few years.
In other contracts, speculators cut their short position on the euro, with 172,331 contracts, from 182,845. The decline was expected especially in the wake of the European Central Bank's stimulus package announced last week that came in below market expectations. The ECB decision had resulted in a big jump in the euro, rising as much as 3.0 percent, on the day of the announcement last Thursday.
On the year though, the euro was down more than 9.0 percent against the dollar. Many in the market had predicted that the euro will slide to parity against the dollar because of the divergence in monetary policy between the Fed and the ECB. However, parity between the euro and the dollar has yet to happen. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, sterling, Swiss franc and Canadian and Australian dollars.
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