May 5, 2017 / 9:01 PM / 3 years ago

UPDATE 1-U.S. dollar net longs fall to lowest in 7 months -CFTC, Reuters data

 (Adds table, comment, details on dollar, euro, sterling 
contracts, byline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, May 5 (Reuters) - Net long positions on the U.S.
dollar fell sharply in the latest week to their lowest level
since early October, according to calculations by Reuters and
Commodity Futures Trading Commission data released on Friday.
    The dollar was a casualty of the euro's strength the past
week after the victory of centrist candidate Emmanuel Macron in
the first round of France's presidential race bolstered
expectations the country would stay in the European Union and
preserve the single currency.
    The second round of France's presidential election will be
held on Sunday, and Macron extended his lead in the polls over
far-right rival Marine Le Pen on Friday.
    The U.S. currency had also struggled as the Trump
administration unveiled a one-page plan proposing deep tax cuts,
many for businesses, that would make the federal deficit balloon
if enacted, far short of comprehensive reforms both parties in
Washington have sought for years.
    Over the last week, the dollar index has fallen 1.4 percent,
also pressured by a softer-than-expected first estimate of U.S.
gross domestic product. 
    The value of the dollar's net long position slid to $12.70
billion in the week ended May 2, from $15.29 billion the
previous week. This week's net long positioning in the dollar
was a seven-month low.
    In other currencies, euro net shorts sank to 1,653
contracts, the lowest level since early May 2014, when
speculators held net long positions on the currency.
    Ahead of France's election on Sunday, the euro on Friday
rose to its highest level since Nov. 9, before ending flat on
the day.
    "If Macron wins with a substantially larger portion of the
vote than expected, he will receive a clearer mandate and
greater backing to steer the country towards helping support and
expand the EU/eurozone," said James Chen, head of research at in Bedminster, New Jersey.
    "It is expected that the euro will likely rise further."
    Meanwhile, sentiment on sterling improved for a third
straight week, with net shorts falling to 81,364 contracts. 
Bearish positioning remains extended, leaving the British pound
vulnerable to further liquidation, said Scotiabank in a research
    The Reuters calculation for the aggregate U.S. 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.
    Japanese Yen (Contracts of 12,500,000 yen) 
 $3.403 billion
         May 2, 2017            Prior week
 Long             37,519            48,538
 Short            68,002            75,407
 Net             -30,483           -26,869
EURO (Contracts of 125,000 euros)
 $0.226 billion
         May 2, 2017            Prior week
 Long            159,418           157,831
 Short           161,071           178,726
 Net              -1,653           -20,895
POUND STERLING (Contracts of 62,500 pounds sterling)
 $6.578 billion
         May 2, 2017           Prior week
 Long             54,281           54,050
 Short           135,645          145,232
 Net             -81,364          -91,182
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $2.233 billion
         May 2, 2017           Prior week
 Long              4,448            7,654
 Short            22,156           24,971
 Net             -17,708          -17,317
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $3.48 billion
         May 2, 2017           Prior week
 Long             66,565           52,545
 Short           114,269           95,187
 Net             -47,704          -42,642
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-3.216 billion 
         May 2, 2017           Prior week
 Long             64,169           64,684
 Short            21,494           21,982
 Net              42,675           42,702
MEXICAN PESO (Contracts of 500,000 pesos)
 $-0.403 billion
         May 2, 2017           Prior week
 Long             91,142           91,689
 Short            76,027           75,651
 Net              15,115           16,038
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $0.83 billion 
         May 2, 2017           Prior week
 Long             19,190           18,693
 Short            31,160           34,097
 Net             -11,970          -15,404

 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Richard
Chang and Leslie Adler)
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