U.S. Markets

Speculators raise net long U.S. dollars; euro longs fall: CFTC, Reuters

NEW YORK (Reuters) - Speculators boosted net long positions on the U.S. dollar, after slashing them the previous week to their lowest level since last August, according to calculations by Reuters and data from Commodity Futures Trading Commission released on Friday.

A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

The value of the dollar’s net long position rose to $7.82 billion in the week ended June 20, from $6.48 billion the previous week. The previous week’s net long dollar position was the lowest since the third week of August last year.

Last week’s interest rate hike by the Federal Reserve along with its hawkish statement have spurred speculators buy back dollars again.

Influential New York Fed President William Dudley also added to the hawkish tone on Monday, saying U.S. inflation is a bit low but should rebound alongside wages as the labor market continues to improve.

That affirms the Fed’s message that a recent patch of weak data is unlikely to derail plans to keep raising interest rates.

“Since last week’s FOMC (Federal Open Market Committee) decision, the dollar has begun to stage a more meaningful rebound after having been heavily pressured for more than a month,” said James Chen, head of research, at in Bedminster, New Jersey.

“The dollar’s latest attempt at a rebound has translated into what appears to be a rough topping pattern for euro/dollar.”

The dollar index though was still down 4.8 percent on the year.

Euro net longs, meanwhile, fell to a one-month low after hitting a more than six-year high the previous week, CFTC data showed. This week, euro net longs fell to 44,852 contracts, from 79,053 the previous week.

Analysts said the euro has been a casualty of recent dollar optimism.

While the data and overall performance of the euro zone’s private sector economy remain robust, the latest fall in manufacturing sector data along with evidence that firms cut prices again in June could prompt the European Central Bank to delay reducing monetary stimulus.

“Such a scenario would likely limit some of the euro’s gains going forward,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

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.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Lisa Shumaker and Marguerita Choy