Speculators trim net US dollar shorts for second week

Speculators' net short US dollar bets fell for a second straight week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday. The value of the net short dollar position was $20.71 billion in the week to April 3, compared with $21.73 billion in the previous week. The market has been short the dollar since the middle of July last year.
US dollar positioning was derived from net contracts of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and 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 valued at $24.966 billion, down slightly from $25.868 billion the week before.
Dollar positioning was consistent with the currency's recovery over the last two weeks, posting gains of about 0.7 percent. For the year, though, the dollar remained down more than 2 percent. Traders, however, believed this week's moves in the futures market were a result of position adjustment after accumulating extreme shorts on the dollar in the last few months. Overall, the dollar's outlook continued to be weak.
"By the middle of next year, we think that the prospect of slower growth in the US economy will bring the Fed's tightening cycle to an end while other major central banks are closer to, or in the process of, tightening policy," Oliver Jones, markets economist, at Capital Economics said. In other currency pairs, dollar/yen positioning switched to a net long of 3,572 contracts this week. Meanwhile, speculators' net short position on bitcoin Cboe futures rose to 1,786 contracts from 1,490 the previous week, the data showed.
Bitcoin continues to slide, down 2.4 percent at $6,606.70 on Friday on the Bitstamp platform, after hitting a record high just shy of $20,000 in December last year. It has lost more than 50 percent of its value in 2018, with other crypto currencies such as ether and ripple also hurt by regulatory scrutiny around the world.