(Adds details, quotes, data) By Dion Rabouin Dec 8 (Reuters) - Speculators increased their bearish, net-short bets on the U.S. dollar to $4.28 billion in latest week of trading, marking the 21st straight week of net-negative speculator dollar positioning, data from the Commodity Futures Trading Commission calculated by Reuters showed. It was the third straight increase in bearish positioning for the dollar and the largest net-negative position since Oct. 24. The value of the net short dollar positions, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was an increase from last week's reading of$3.93 billion in the week ended Nov. 28. The dollar rose this week in foreign exchange currency markets, buoyed by optimism about a tax reform proposal before the U.S. Congress and almost universal expectations for an interest rate increase next week by the Federal Reserve. Investors are also beginning to expect the Fed to raise rates multiple times next year, with many analysts projecting four rate hikes in 2018. The tax proposal would slash corporate tax rates and could lead to faster growth and spending, prompting further interest rate increases by the Fed to keep a lid on inflation. Higher interest rates make a currency more attractive for investors to hold. However, speculators continued to sell dollars, driving lower the overall level of dollar positioning. The dollar's value against six major currencies has risen over the past two weeks, but had fallen in the three previous weeks as investors began to doubt the tax cut's impact on the economy. Another reason for the dollar's fall may have been the growing attractiveness of other assets, including bitcoin and other cryptocurrencies. Demand for the alternative currencies has crashed cryptocurrency websites and sent the value of bitcoin to an all-time high above $16,000 per bitcoin this week. "It's about the very nature of how other mediums of tender will affect fluctuations of the dollar," said Juan Perez, currency strategist at Tempus Inc in Washington. "There is a lot of uncertainty about how exactly this new medium will work and what type of adaptation will there be." Perez added, "It really comes to a matter of the options." The Reuters calculation for the aggregate U.S. dollar position is derived from net positions of International Monetary speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars. JAPANESE YEN (Contracts of 12,500,000 yen) $12.687 billion 05 Dec 2017 Prior week week Long 34,766 39,793 Short 149,033 150,433 Net -114,267 -110,640 EURO (Contracts of 125,000 euros) $-13.761 billion 05 Dec 2017 Prior week week Long 205,400 205,160 Short 112,294 115,479 Net 93,106 89,681 POUND STERLING (Contracts of 62,500 pounds sterling) $-0.538 billion 05 Dec 2017 Prior week week Long 89,270 66,549 Short 82,864 61,976 Net 6,406 4,573 SWISS FRANC (Contracts of 125,000 Swiss francs) $3.744 billion 05 Dec 2017 Prior week week Long 17,891 17,581 Short 47,458 47,765 Net -29,567 -30,184 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $-3.347 billion 05 Dec 2017 Prior week week Long 66,467 67,882 Short 24,001 22,224 Net 42,466 45,658 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $-3.067 billion 05 Dec 2017 Prior week week Long 83,634 78,202 Short 43,306 39,320 Net 40,328 38,882 MEXICAN PESO (Contracts of 500,000 pesos) $-2.574 billion 05 Dec 2017 Prior week week Long 121,003 112,966 Short 24,480 23,400 Net 96,523 89,566 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $0.886 billion 05 Dec 2017 Prior week week Long 24,228 23,960 Short 37,121 37,982 Net -12,893 -14,022 (Reporting by Dion Rabouin; Editing by Diane Craft and Sandra Maler)
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