Bonds News

UPDATE 1-Speculators lift U.S. dollar bets for 3rd week-CFTC, Reuters data

(Adds table, comments, details, byline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Jan 6 (Reuters) - Speculators boosted net long
bets on the dollar for a third straight week on expectations of
multiple U.S. rate hikes by the Federal Reserve this year,
according to data from the Commodity Futures Trading Commission
and calculations by Reuters. 
    The value of the dollar's net long position was $25.43
billion in the week ended Jan. 3, up from $24.17 billion the
week before. This week's net long dollar position was the
highest since the week of Dec. 13.
    There is much cause for dollar optimism especially in the
wake of a December U.S. jobs report that finally showed wage
    Lackluster earnings and low inflation have prevented the Fed
from raising interest rates and the rise in December wages
suggested that the U.S. economy was nearing full employment,
analysts said. That should keep the Fed on track to raise
interest rates as much as three times this year.
    The non-farm payrolls report is one in a series of economic
numbers showing steady improvement of the U.S. economy.
    "We wouldn't be surprised to see some hawkish Fed talk this
week, with the intention of preparing markets for the prospects
of a first quarter rate hike," said ING in a research note.
    "Strong U.S. inflation and growth data over the next month
will likely see the reflationary uptick in U.S. yields continue
and this means a dollar buy-on-dips strategy remains
    Meanwhile, net short contracts on the yen slipped to 86,764,
after rising for nine straight weeks. The yen is tied to the
dollar's fortunes overall, and stands to benefit the most should
an overextended U.S. currency falter.
    Kathy Lien, managing director FX strategy at BK Asset
Management in New York, expects the dollar to consolidate in the
115-117.50 yen range.
    "The Fed isn't going to be raising interest rates anytime
soon so for the time being, gains for the overstretched dollar
could be limited but at the same time, pullbacks ahead of Donald
Trump's inauguration should be shallow," she added.
    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) 
 $9.211 billion
         03 Jan 2017            Prior week
 Long             37,962            40,565
 Short           124,726           127,574
 Net             -86,764           -87,009
EURO (Contracts of 125,000 euros)
 $9.111 billion
         03 Jan 2017            Prior week
 Long            129,701           123,281
 Short           199,757           192,689
 Net             -70,056           -69,408
POUND STERLING (Contracts of 62,500 pounds sterling)
 $4.952 billion
         03 Jan 2017           Prior week
 Long             55,482           50,062
 Short           120,224          107,161
 Net             -64,742          -57,099
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $1.636 billion
         03 Jan 2017           Prior week
 Long             11,813           14,303
 Short            25,252           24,394
 Net             -13,439          -10,091
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $0.288 billion
         03 Jan 2017           Prior week
 Long             39,546           36,597
 Short            43,417           38,195
 Net              -3,871           -1,598
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $0.235 billion 
         03 Jan 2017           Prior week
 Long             47,948           44,076
 Short            51,204           45,586
 Net              -3,256           -1,510
MEXICAN PESO (Contracts of 500,000 pesos)
 $1.555 billion
         03 Jan 2017           Prior week
 Long             22,279           21,411
 Short            87,915           83,068
 Net             -65,636          -61,657
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $0.789 billion 
         03 Jan 2017           Prior week
 Long             25,522           25,448
 Short            36,935           36,449
 Net             -11,413          -11,001
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrew Hay
and Lisa Shumaker)