Speculators cut net dollar longs to lowest since mid-June

30 Aug, 2015

Speculators pared back bullish bets on the US dollar in the latest week to their smallest in more than two months, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position fell to $23.99 billion in the week ended August 25, from $32.26 billion the previous week. This was the first time in four weeks that net dollar longs came in below $30 billion.
To be long a currency is to make a bet it will rise, while being short is a bet its value will decline. Concerns about global equity weakness and China's deepening slowdown convinced speculators that the Federal Reserve would delay raising interest rates. That prompted a sell-off in the dollar the last two weeks.
At the same time, investors bought back the euro and yen, as they unwound carry trades, or bets in high-yielding assets, funded in both low-interest rate currencies. As a result, net euro short contracts dropped to 66,078 in the latest week, from 92,732 previously. This week's net euro shorts were the smallest in more than a year. Net short yen contracts also fell to 39,059, from 90,130 the previous week. That was the lowest net shorts since mid-May. 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.

Read Comments