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U.S. dollar net shorts hit largest since July 2021 -CFTC, Reuters data

Published 29/11/2022, 09:10 am
Updated 29/11/2022, 09:17 am
© Reuters. Signage is seen outside of the US Commodity Futures Trading Commission (CFTC) in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly/File Photo

NEW YORK (Reuters) - Speculators raised net short U.S. dollar positioning in the latest week to its largest level since July 2021, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Monday.

The value of the net short dollar position hit $1.82 billion in the week ended Nov. 22 from a net short of $10.5 million in the previous week. Speculators have been net short the dollar for a second straight week.

Investors have flipped their net long dollar positions, anticipating weakness in the U.S. currency on expectations that the Federal Reserve will slow the pace of interest rates increases after raising them by 75 basis points multiple times.

Last week, the dollar fell another 0.9%. For the month of November, the dollar index has so far dropped about 4.3%, on track for its largest monthly fall since September 2010.

However, record COVID cases in China and citizens protesting against the country's zero-COVID rules have increased safe-haven flows to the U.S. dollar.

"The (dollar index) has certainly shown some signs of life around its 200-day average and support in the 1.0500-1.0540 area. But it is far too early to say whether this will turn into a full-on rally," wrote Fawad Razaqzada, market analyst at City Index and Forex.com in London, in a research note.

He added that 200-day moving average is a key support and the dollar is still inside a long-term bull trend.

"After the recent sell-off, the downside risks have now diminished in my view," said Razaqzada.

The increase in net short dollar positioning came as euro net longs soared to 123,112 contracts, the highest since February 2021.

In the cryptocurrency market, net longs on bitcoin futures rose to 706, the highest since the week of Oct. 11, CFTC data showed. Speculators have been net long bitcoin for a third straight week.

The increase in net longs on bitcoin came as the crypto market grappled with the fallout from the collapse of crypto exchange FTX when it filed for bankruptcy a few weeks ago.

U.S. cryptocurrency lender BlockFi said on Monday it had filed for Chapter 11 bankruptcy protection along with eight affiliates in a New Jersey court.

Bitcoin was last down 1.31% at $16,209. Since the beginning of the year, bitcoin has plunged 65%.

Japanese Yen (Contracts of 12,500,000 yen)

$5.909 billion

22 Nov 2022 Prior week

week

Long 30,800 33,797

Short 95,650 99,639

Net -64,850 -65,842

EURO (Contracts of 125,000 euros)

$-14.573 billion

22 Nov 2022 Prior week

week

Long 239,598 239,369

Short 116,486 126,703

Net 123,112 112,666

POUND STERLING (Contracts of 62,500 pounds sterling)

$2.433 billion

22 Nov 2022 Prior week

week

Long 30,917 34,699

Short 66,859 67,533

Net -35,942 -32,834

SWISS FRANC (Contracts of 125,000 Swiss francs)

$2.228 billion

22 Nov 2022 Prior week

week

Long 1,910 2,271

Short 16,386 19,098

Net -14,476 -16,827

CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)

$0.973 billion

22 Nov 2022 Prior week

week

Long 36,733 37,456

Short 48,405 50,376

Net -11,672 -12,920

AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)

$3.023 billion

22 Nov 2022 Prior week

week

Long 32,825 33,214

Short 75,611 77,963

Net -42,786 -44,749

MEXICAN PESO (Contracts of 500,000 pesos)

$-1.753 billion

22 Nov 2022 Prior week

week

Long 188,446 197,700

Short 125,127 129,849

Net 63,319 67,851

NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)

$0.408 billion

22 Nov 2022 Prior week

week

Long 15,536 15,285

© Reuters. Signage is seen outside of the US Commodity Futures Trading Commission (CFTC) in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly/File Photo

Short 19,820 21,913

Net -4,284 -6,628

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