November 13, 2017 / 10:13 PM / a year ago

UPDATE 1-Speculators' net short bets on dollar at near 4-month low -CFTC, Reuters

 (Adds details, comments, tabular data, byline)
    By Saqib Iqbal Ahmed
    NEW YORK, Nov 13 (Reuters) - Speculators' net short bets on
the U.S. dollar slipped to the smallest position in nearly four
months, according to calculations by Reuters and Commodity
Futures Trading Commission data released on Monday.
    The value of the dollar's net short position, derived from
net positions of International Monetary Market speculators in
the yen, euro, British pound, Swiss franc and Canadian and
Australian dollars, was $1.92 billion, in the week to Nov. 7.
    That compares with a net short position of $3.37 billion the
previous week. To be short a currency means traders believe it
will fall in value.
    In a wider measure of dollar positioning that
includes net contracts on the New Zealand dollar, Mexican peso,
Brazilian real and Russian ruble, the U.S. dollar posted a net
short position valued at $3.69 billion, down from $5.61 billion
a week earlier.
    "The drivers behind this is the growing market optimism that
we will get a tax bill passed, which would have positive
consequences for the dollar," said Paresh Upadhyaya, director of
currency strategy at Amundi Pioneer Investment Management in
    Investors are focused on lawmakers' efforts to overhaul the
U.S. tax code and are closely tracking developments around the
tax bill after U.S. Senate Republicans last week unveiled a new
plan that differed from the House of Representatives' version.
    Members of the U.S. House of Representatives and Senate were
debating their respective plans this week before heading home
for the U.S. Thanksgiving Day holiday.
    Investors' expectations for the dollar to benefit from U.S.
corporations repatriating profits has also helped boost
sentiment in favor of the dollar, Upadhyaya said.
    Both the Senate and House tax plans include a one-time
repatriation tax.
    Meanwhile, the net short position on the Japanese yen was at
 127,848 contracts, or the largest since January 2014 and the
net short position on the Swiss franc grew to 25,110 contracts,
the largest since December 2016.
    The short position in low yielding currencies, the Japanese
yen and Swiss franc, have grown over the last few weeks as
Treasury bond yields climbed. 
    Investors' preference for borrowing at low rates in one
currency to invest in another with higher returns creates
selling pressure on low-yielding currencies such as the yen and
the Swiss franc.
    "It's definitely a rates play," said Upadhyaya.
Japanese Yen (Contracts of 12,500,000 yen) 
 $14.018 billion
         Nov. 10, 2017          Prior week
 Long             54,336            54,585
 Short           182,184           173,454
 Net            -127,848          -118,869
EURO (Contracts of 125,000 euros)
 $-12.375 billion
         Nov. 10, 2017          Prior week
 Long            181,335           173,670
 Short            95,880           101,573
 Net              85,455            72,097
POUND STERLING (Contracts of 62,500 pounds sterling)
 $0.757 billion
         Nov. 10, 2017         Prior week
 Long             50,403           65,482
 Short            59,601           64,237
 Net              -9,198            1,245
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $3.139 billion
         Nov. 10, 2017         Prior week
 Long             19,568           21,001
 Short            44,678           41,672
 Net             -25,110          -20,671
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $-3.984 billion
         Nov. 10, 2017         Prior week
 Long             75,460           84,309
 Short            24,571           26,470
 Net              50,889           57,839
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-3.473 billion 
         Nov. 10, 2017         Prior week
 Long             75,144           85,422
 Short            29,707           33,814
 Net              45,437           51,608
MEXICAN PESO (Contracts of 500,000 pesos)
 $-1.488 billion
         Nov. 10, 2017         Prior week
 Long             88,731           87,220
 Short            31,756           31,974
 Net              56,975           55,246
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $0.772 billion 
         Nov. 10, 2017         Prior week
 Long             18,943           21,763
 Short            30,130           27,470
 Net             -11,187           -5,707
 (Reporting by Saqib Iqbal Ahmed; Editing by Meredith Mazzilli)
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