Speculators boosted bullish bets on the US dollar in the latest week, lifting net longs to their highest level since early February, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters. The value of the dollar's net long position totaled $15.26 billion in the week ended March 7, up from $13.01 billion the previous week. It was the highest level in four weeks.
The increase in net long dollar positioning was expected after Federal Reserve Chair Janet Yellen last Friday gave her strongest signal yet that the US central bank could lift interest rates when it meets on March 14-15. Yellen's signal plus Friday's upbeat US non-farm payrolls report for February, which showed new jobs of 235,000, have reinforced expectations of an interest rate hike next week.
"We had thought that only a collapse in wages, which was not showing up in data leading to today's report, would keep the Fed at bay next week," said Marvin Loh, senior global markets strategist at BNY Mellon in Boston. "Therefore the report provides an all-clear to a Fed that seems to badly want to start the normalization process."
Fed fund futures late on Friday showed a 93 percent chance of a rate hike next week, according to the CME's FedWatch. The dollar fell on Friday even after the robust US jobs number, but analysts said the good news had already been priced in for now. Net shorts on the euro also rose, to 59,501 contracts, the largest since early January, data showed.
The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.
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