(Adds details on dollar, yen, euro contracts, adds comments, byline) By Gertrude Chavez-Dreyfuss NEW YORK, Dec 9 (Reuters) - Speculators increased positive bets on the U.S. dollar for a third straight week, pushing net longs to their highest since early January. The value of the dollar's net long position rose to $28.14 billion in the week ended Dec. 6, from $24.82 billion in the previous week, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. The continued rise in long dollar positioning is not a surprise given expectations of higher inflation with increased infrastructure spending under a Trump administration. With more upbeat U.S. economic data including a generally solid U.S. non-farm payrolls report for November, the Federal Reserve is widely expected to raise interest rates next week. That expectation has underpinned the dollar for the past several weeks, with the greenback posting a 3 percent gain so far this year. The focus now turns to the number of rate increases the Fed could signal at the conclusion of the policy meeting on Wednesday. "There have actually been widespread improvements in the U.S. economy with consumer spending up and inflation on the rise," said Kathy Lien, managing director of FX strategy at BK Asset Management in New York. "The dollar will rise if the dot plot shows expectations for more than two rate hikes in 2017. The last plot had Fed Presidents looking for 50 basis points of tightening next year." Net shorts on the yen, meanwhile, rose to their largest since December last year, at 33,937 contracts. Speculators turned net short the yen last week after months of being long. The yen has been engulfed in a Trump-inspired dollar rally. The longer-term rate differentials between the U.S. and Japan 10-year notes continue to widen at more than 200 basis points, the largest gap in favor of the U.S. dollar since 2010 and supporting further gains in the greenback against the yen. Euro short contracts, on the other hand, fell to 114,556, their lowest since mid-October. The euro retains a weak tone against the dollar after Thursday's steep fall in the wake of the European Central Bank's decision to extend its quantitative easing by nine months. "Heavy losses yesterday and no real bounce into the end of the week suggest euro/dollar may be on the cusp of another biggish shunt lower," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto. The Reuters calculation for the aggregate U.S. dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, sterling, Swiss franc and Canadian and Australian dollars. Japanese Yen (Contracts of 12,500,000 yen) $3.722 billion 06 Dec 2016 Prior week week Long 74,367 72,124 Short 108,304 72,393 Net -33,937 -269 EURO (Contracts of 125,000 euros) $15.346 billion 06 Dec 2016 Prior week week Long 123,390 136,108 Short 237,946 255,348 Net -114,556 -119,240 POUND STERLING (Contracts of 62,500 pounds sterling) $6.119 billion 06 Dec 2016 Prior week week Long 43,169 50,806 Short 120,407 128,941 Net -77,238 -78,135 SWISS FRANC (Contracts of 125,000 Swiss francs) $3.143 billion 06 Dec 2016 Prior week week Long 9,859 13,027 Short 35,256 37,361 Net -25,397 -24,334 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $1.368 billion 06 Dec 2016 Prior week week Long 21,538 25,010 Short 39,696 43,586 Net -18,158 -18,576 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $-1.557 billion 06 Dec 2016 Prior week week Long 48,274 54,791 Short 27,403 33,834 Net 20,871 20,957 MEXICAN PESO (Contracts of 500,000 pesos) $1.326 billion 06 Dec 2016 Prior week week Long 18,619 19,314 Short 72,685 73,814 Net -54,066 -54,500 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $0.281 billion 06 Dec 2016 Prior week week Long 27,641 30,231 Short 31,593 32,103 Net -3,952 -1,872 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Brown and Andrew Hay)
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