Speculators pare net long US dollars; sterling shorts fall

Speculators' net long US dollar positioning fell in the latest week, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday.

The value of the net long dollar position was $19.85 billion in the week ended Dec. 10, compared with $21.21 billion the previous week. Net long dollars fell for the first time in six weeks.

In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the US dollar posted a net long position of $18.18 billion, down from $19.77 billion a week earlier.

The dollar's fortunes have been tied to US-China trade negotiations, weakening on positive trade news and rallying as a safe haven on negative reports. There were numerous reports this week suggesting a phase one deal was in the works, which culminated in the news of an agreement reached between the two countries on Friday.

The deal involves cutting back some US tariffs in exchange for more Chinese purchases of American agricultural products and other goods.

Amid this week's trade optimism, the dollar index fell 0.5%. In other futures contracts, sterling's net short position fell to 22,639 contracts, the lowest since mid-May.

Sterling posted sharp gains on Friday after a resounding election victory for Prime Minister Boris Johnson's Conservative Party.

The pound last traded up at $1.3335, giving up some of the gains it made overnight when it surged to a 19-month high of $1.3516.