October 20, 2017 / 8:55 PM / 3 years ago

UPDATE 1-Speculators pare bearish bets on dollar -CFTC, Reuters data

 (Adds details, comments, tabular data, byline)
    By Saqib Iqbal Ahmed
    NEW YORK, Oct 20 (Reuters) - Speculators trimmed their
bearish bets on the U.S. dollar in the latest week to the
smallest position in more than a month, but retained a
significantly negative bias against the greenback, according to
calculations by Reuters and Commodity Futures Trading Commission
data released on Friday.
    The value of the dollar's net short position, derived from
net positions of International Monetary Market speculators in
the yen, euro, British pound, Swiss franc and Canadian and
Australian dollars, was $12.65 billion, in the week to Oct. 17.
    That compares with a net short position of $15.42 billion
the previous week and marks the fourteenth straight week that
investors have had a net short position on the greenback.
    To be short a currency means traders believe it will fall in
    In a wider measure of dollar positioning that
includes net contracts on the New Zealand dollar, Mexican peso,
Brazilian real and Russian ruble, the U.S. dollar posted a net
short position valued at $16.33 billion, down from $19.28
billion a week earlier.
    The dollar has slipped this year as investors fretted over 
U.S. President Donald Trump's inability to pass proposed tax
cuts and infrastructure spending plans through Congress.
    The dollar index, which tracks the greenback against
six major currencies, is down about 8 percent this year, its
worst performance for any comparable period since 2003.
    The index found some relief this week on hopes that
President Trump's tax-cut plan would make further headway after
the Senate passed a budget resolution.
    On Thursday, the Senate approved a budget blueprint for the
2018 fiscal year that will pave the way for Republicans to
pursue a tax-cut package without Democratic support.

    "You can expect to see long dollar positions rebuilt, given
that there is higher expectation right now that we are going to
get some sort of tax reform passed,"," said Sireen Harajli,
foreign exchange strategist at Mizuho in New York.
    Investors have also viewed as bullish for the dollar remarks
this week from Federal Reserve Chair Janet Yellen and other
members of the Fed that suggest the central bank is moving
forward with another rate hike this year.
    Meanwhile, speculators retained a net short position in the
Japanese yen, ahead of Japan's national election on Sunday.
Japanese Prime Minister Shinzo Abe's ruling coalition is on
track for a big win a media survey showed on Monday.

    The expectation is that a victory for Abe would spell a
continuation of Japan's ultra-loose monetary policy, which will
put downward pressure on the yen, Harajli said.    
Japanese Yen (Contracts of 12,500,000 yen) 
 $11.285 billion
         17 Oct 2017            Prior week
 Long             55,010            51,655
 Short           156,296           153,074
 Net            -101,286          -101,419
EURO (Contracts of 125,000 euros)
 $-13.303 billion
         17 Oct 2017            Prior week
 Long            186,751           195,816
 Short            96,299            97,737
 Net              90,452            98,079
POUND STERLING (Contracts of 62,500 pounds sterling)
 $-0.416 billion
         17 Oct 2017           Prior week
 Long             72,871           79,610
 Short            67,824           64,102
 Net               5,047           15,508
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $0.63 billion
         17 Oct 2017           Prior week
 Long             22,174           18,211
 Short            27,105           22,473
 Net              -4,931           -4,262
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $-5.998 billion
         17 Oct 2017           Prior week
 Long             94,507           97,068
 Short            19,421           20,676
 Net              75,086           76,392
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-4.847 billion 
         17 Oct 2017           Prior week
 Long             85,763           93,702
 Short            23,963           24,520
 Net              61,800           69,182
MEXICAN PESO (Contracts of 500,000 pesos)
 $-1.893 billion
         17 Oct 2017           Prior week
 Long             98,936          102,473
 Short            27,869           19,724
 Net              71,067           82,749
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $-0.5 billion 
         17 Oct 2017           Prior week
 Long             20,423           21,529
 Short            13,446           15,800
 Net               6,977            5,729
 (Reporting by Saqib Iqbal Ahmed; Editing by James Dalgleish and
Diane Craft)
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