June 16, 2017 / 9:15 PM / a month ago

UPDATE 1-U.S. dollar net longs fall to lowest since August-CFTC, Reuters data

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 (Adds details on dollar, euro, sterling contracts, table,
analyst comment, byline)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 16 (Reuters) - Speculators slashed net long
positions on the U.S. dollar in the latest week to their lowest
level since last August, according to calculations by Reuters
and Commodity Futures Trading Commission data released on
    The value of the dollar's net long position slid to $6.48
billion in the week ended June 13, from $8.0 billion the
previous week. 
    Up until the Federal Reserve's interest rate hike on
Wednesday, the dollar had been on a declining trend this year
amid a spate of soft data such as U.S. inflation and non-farm
    Aside from the rate increase, the Fed also maintained its
outlook for a total of three interest rate increases this year
as well as three more projected for 2018. It also announced a
quicker-than-expected start to the unwinding its balance sheet
beginning this year.
    The Fed viewed the U.S. economy's soft patch as temporary in
nature and should not affect its tightening stance. Analysts
said this should help the dollar's prospects.
    "A dovish Bank of Japan and European Central Bank have
helped support the dollar with dollar/yen and euro/dollar
showing possible reversal signs in their respective bearish and
bullish trends," said London-based Fawad Razaqzada, market
analyst at Forex.com.
    "Thus, the dollar may be able to appreciate despite the
weakness in U.S. macro figures. For now, investors are giving
the Fed the benefit of the doubt – only just."
    The dollar index so far this year though was still down
nearly 5.0 percent, on track for its worst yearly performance in
10 years.
    Euro net longs, meanwhile, rose to a more than six-year
high, with 79,053 contracts, CFTC data showed.
    Ahead of the Fed's midweek rate meeting, the euro had
climbed to highs for the year against the dollar, in line with
increasing long speculative positioning on the currency.
    Friday's data from Europe, however, suggested little scope
for the ECB to back off its low rate policies as inflation was
confirmed at a slower rate of 1.4 percent annually in May, below
the bank's target, said Joe Manimbo, senior market analyst, at
Western Union Business Solutions in Washington.
    In other currencies, sterling net shorts rose to their
largest since early May, with 39,441 contracts.
    The pound has been under a cloud of political uncertainty
after Prime Minister Theresa May weakened her mandate with a 
disappointing performance in last week's UK election. 
Japanese Yen (Contracts of 12,500,000 yen) 
 $5.742 billion
         13 Jun 2017            Prior week
 Long             34,160            39,736
 Short            84,713            94,763
 Net             -50,553           -55,027
EURO (Contracts of 125,000 euros)
 $-11.081 billion
         13 Jun 2017            Prior week
 Long            164,227           164,889
 Short            85,174            90,880
 Net              79,053            74,009
POUND STERLING (Contracts of 62,500 pounds sterling)
 $3.143 billion
         13 Jun 2017           Prior week
 Long             40,552           40,147
 Short            79,993           76,863
 Net             -39,441          -36,716
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $1.866 billion
         13 Jun 2017           Prior week
 Long              8,518            6,752
 Short            22,978           23,307
 Net             -14,460          -16,555
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $6.691 billion
         13 Jun 2017           Prior week
 Long             26,781           26,492
 Short           115,376          120,993
 Net             -88,595          -94,501
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $0.114 billion 
         13 Jun 2017           Prior week
 Long             33,134           39,101
 Short            34,645           39,215
 Net              -1,511             -114
MEXICAN PESO (Contracts of 500,000 pesos)
 $-2.654 billion
         13 Jun 2017           Prior week
 Long            123,468          115,601
 Short            27,654           30,780
 Net              95,814           84,821
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $-0.115 billion 
         13 Jun 2017           Prior week
 Long             27,261           19,348
 Short            25,666           21,133
 Net               1,595           -1,785
 (Reporting by Gertrude Chavez-Dreyfuss; editing by Diane Craft)

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