US dollar net longs fall for first time in four weeks

Speculators reduced bullish bets on the US dollar for the first time in four weeks, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters. The value of the dollar's net long position totalled $15.27 billion in the week ended March 28, down from $18.44 billion the previous week.
The dollar wobbled in the aftermath of the US administration's legislative turmoil last Friday in which President Donald Trump's fellow Republicans pulled their bill to overhaul the US healthcare system due to a shortage of votes. The dollar index earlier this week had fallen to its lowest since November, undermined by the healthcare debacle in Washington, recovering modestly since.
In the month of March, however, the dollar was down 0.6 percent and was 1.7 percent weaker for the first quarter. A major catalyst for the dollar's weakness in March has been the Federal Reserve, which raised US interest rates at its last monetary policy meeting, but stuck to its original forecast for three rate increases this year. Investors had expected the Fed to signal at least four rate hikes in 2017.
"This relative dovishness helped prompt a sharp slide for the dollar and a sharp boost for equities and gold," said James Chen, head of research at Forex.com in Bedminster, New Jersey. "The dollar's market reaction has since been pared to a certain extent, as the Fed has once again begun issuing more hawkish signals." Going forward, Chen expects the dollar to gain ground as the Fed remains the only major central bank in a definitive tightening mode. Net euro short positions, meanwhile, fell to 7,923 contracts, their lowest since May 2014.
Euro sentiment improved after the European Central Bank initially sent signals that it may actually hike before ending its massive quantitative easing program. This gave the euro a significant boost in mid-March, but that rise was short-lived, as ECB officials sent a message this week that the central bank is still very much in easing mode. 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.