U.S. dollar net long bets jump to largest since mid-June 2019 -CFTC, Businesshala data

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  • Euro positioning turns net short
  • Biggest bitcoin net shorts since late July
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NEW YORK, Oct 8 (Businesshala) – The net value of the US dollar rose to its highest level in two years in the latest week, according to Businesshala calculations and Commodity Futures Trading Commission data released on Friday.

Net long dollar positions were valued at $22.89 billion for the week ended October 5, up from $16.37 billion in the previous week. After being net short for 16 months, the position of the US dollar has remained net for 12 consecutive weeks.

US dollar positions were derived from international money market speculators’ net contracts in the Japanese yen, euro, British pound and Swiss franc, as well as the Canadian and Australian dollars.

In a broader measure of dollar position, which includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net long position of $22.535 billion this week, up from $15.33 billion earlier.

The dollar has been on a tear since the September 21-22 Federal Reserve monetary policy meeting, which suggested a possible lack of purchases of the Fed’s assets, starting in November of this year and ending in June 2022.

The tapering turns dollar-positive because the Fed will be buying less debt assets, meaning there will be less dollars in circulation, making the currency more valuable.

The dollar index has risen more than 1% since the September meeting.

However, the dollar recovered on Friday after reports of heavy US non-farm payrolls. Data showed that US non-farm payrolls increased by 194,000 jobs last month, compared to a forecast of 500,000 new jobs. But the August figures were revised to create 366,000 jobs instead of the 235,000 posts reported earlier.

“US inflation data released next Wednesday may provide evidence that inflationary pressures are proving to be less ‘temporary’ than generally expected,” Jonathan Peterson, market economist at Capital Economics, wrote in his latest research note. “

“Our view is that this will push US yields and the dollar a little higher in the coming months.”

Among other contracts, euro positions declined in the latest week with net short contracts worth 22,334 from net long positions of 872 last week. The euro is a laggard among the G10 currencies, weighed down by a wavering stance by the European Central Bank.

In the cryptocurrency market, bitcoin net shorts totaled 1,518 contracts for the week ended October 5, up from 883 net short contracts the previous week. This week’s net short contracts in bitcoin were the largest since late July.

That said, bitcoin hit a five-month high of $56,168 on Friday, boosted by continuing institutional demand, gaining some legitimacy among investors.

Bitcoin is up 87.5% since its June low of $28,600.

Japanese Yen (contracts of 12,500,000 yen)

$7.144 billion

Euro (contracts of 125,000 euros)

$3.237 billion

Pound Sterling (contracts of 62,500 Pound Sterling)

$1.705 billion

Swiss Franc (contracts of 125,000 Swiss Francs)

$2.113 billion

Canadian Dollar (100,000 Canadian Dollar contracts)

$2.135 billion

Australian Dollar (100,000 Australian Dollar contracts)

$6.56 billion

Mexican Peso (contracts worth 500,000 pesos)

$0.866 billion

New Zealand Dollar (100,000 New Zealand Dollar contracts)

$-0.561 billion

Reporting by Gertrude Chavez-Dreyfus; Editing by Leslie Adler and Shailesh Kuber

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