Speculators raised their net-short bets on the US dollar to $7.81 billion in the latest week, the 22nd straight week of bearish bets against the US currency, according to data from the Commodity Futures Trading Commision calculated by Reuters. It was the fourth straight week the net-negative positioning on the dollar has increased and was the largest net-negative position since Oct. 24. The bearish bets almost doubled from last week's total.
The value of the net short dollar positions, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was an increase from the $4.28 billion reading in the week ended Dec. 5.
The dollar index edged up this week as expectations rose that the US Senate would pass a tax reform bill. Although Democrat Doug Jones was the surprise winner of a special election in Alabama over Republican Roy Moore, the seat is still occupied by Luther Strange, who supports the legislation. Jones is not expected to be seated until after Christmas.
Republican lawmakers said on Friday the US Congress was putting the finishing touches on the sweeping tax overhaul. Speculators, however, have lost faith in the tax overhaul's ability to generate US economic growth and increase the pace of interest rate hikes from the Federal Reserve, increasing the bearish bets on the dollar.
Additionally, expectations for increased global growth have dimmed the dollar's prospects recently, as riskier currencies would be favored in an environment of global economic strength. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.
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