October 13, 2017 / 8:50 PM / a year ago

UPDATE 1-Speculators trim bearish bets on dollar -CFTC, Reuters data

 (Adds details, comments, tabular data, byline)
    By Saqib Iqbal Ahmed
    NEW YORK, Oct 13 (Reuters) - Speculators trimmed their
bearish bets on the U.S. dollar for a second straight week but
retained a significantly negative bias against the greenback,
according to calculations by Reuters and Commodity Futures
Trading Commission data released on Friday.
    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 $15.42 billion, in the week to Oct. 10.
    That compares with a net short position of $16.83 billion
the previous week and marks the thirteenth straight week that
investors have had a net short position on the greenback.
    To be short a currency means traders believe it will fall in
    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 $19.28 billion, down from $21.01
billion a week earlier.
    The dollar has come under pressure this year, hit by U.S.
President Donald Trump's inability to pass proposed tax cuts and
infrastructure spending plans through Congress, which were
expected to boost growth and inflation and increase the pace of
interest rate hikes by the Federal Reserve.
    Unless there is a loss of momentum in other markets,
speculators are unlikely to give up on their negative bias
against the dollar, said Karl Schamotta, director of global
product and market strategy at Cambridge Global Payments in
    Schamotta, however, warned that speculators could get hurt
if there is any progress with the Trump administration's tax
reform agenda over the next three weeks.
    "Also, if we do see a turn towards the hawkish in terms of
governance of the Fed, that would likely boost the dollar as
well," he said.
    Trump is considering a variety of choices to replace current
Fed Chair Janet Yellen, whose term on the Fed expires on Jan.
31. Former Fed governor Kevin Warsh is seen by traders as the
current frontrunner to succeed Yellen.
    In light of his past stance against expansion of the Fed's
balance sheet, Warsh is seen as more hawkish than Yellen,
analysts said.
    "The thing about shorting the dollar is that it is often
akin to picking up nickels in front of a steamroller," he said.
    Meanwhile, the net short position in the Japanese yen grew
to 101,419 contracts, the largest since early August.
Japanese Yen (Contracts of 12,500,000 yen) 
 $11.275 billion
         Oct. 10, 2017          Prior week
 Long             51,655            58,770
 Short           153,074           143,413
 Net            -101,419           -84,643
EURO (Contracts of 125,000 euros)
 $-14.474 billion
         Oct. 10, 2017          Prior week
 Long            195,816           187,053
 Short            97,737            96,220
 Net              98,079            90,833
POUND STERLING (Contracts of 62,500 pounds sterling)
 $-1.28 billion
         Oct. 10, 2017         Prior week
 Long             79,610           80,325
 Short            64,102           60,376
 Net              15,508           19,949
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $0.546 billion
         Oct. 10, 2017         Prior week
 Long             18,211           17,614
 Short            22,473           20,907
 Net              -4,262           -3,293
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $-6.105 billion
         Oct. 10, 2017         Prior week
 Long             97,068           97,204
 Short            20,676           22,076
 Net              76,392           75,128
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-5.38 billion 
         Oct. 10, 2017         Prior week
 Long             93,702           98,499
 Short            24,520           26,687
 Net              69,182           71,812
MEXICAN PESO (Contracts of 500,000 pesos)
 $-2.198 billion
         Oct. 10, 2017         Prior week
 Long            102,473          117,452
 Short            19,724           28,336
 Net              82,749           89,116
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $-0.405 billion 
         Oct. 10, 2017         Prior week
 Long             21,529           20,928
 Short            15,800           12,810
 Net               5,729            8,118

 (Reporting by Saqib Iqbal Ahmed; Editing by Andrew Hay and
Chris Reese)
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