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UPDATE 1-Speculators cut net U.S. dollar longs in latest week -CFTC, Reuters
January 13, 2017 / 9:48 PM / 10 months ago

UPDATE 1-Speculators cut net U.S. dollar longs in latest week -CFTC, Reuters

(Adds table, comment, byline, details on dollar, euro, Mexican
peso contracts)
    By Gertrude Chavez-Dreyfuss
    Jan 13 (Reuters) - Speculators pared back net long bets on
the U.S. dollar in the latest week, as investors reduced
positions that have become overextended due to a rally inspired
by Donald Trump's victory in the U.S. presidential election two
months ago. 
    The value of the dollar's net long position was $24.95
billion in the week ended Jan. 10, from $25.43 billion the
previous week, according to data from the Commodity Futures
Trading Commission and calculations by Reuters.
    The dollar this week posted its worst weekly performance
since November as the positive effect of Trump on the market
seems to be fading. At Wednesday's first press briefing before
his inauguration next week, Trump failed to provide details on
his much-touted fiscal stimulus plan of increased infrastructure
spending and tax cuts. That disappointed stock and dollar bulls
that had rallied on those themes.
    The dollar struggled as a result, but market participants
said the currency's downdraft was temporary.
    "We do expect a return of dollar strength, with next week
possibly providing the pivot point," said John Hardy, head of FX
strategy, at Saxo Bank in Copenhagen. 
    "We move toward Donald Trump's inauguration on Friday as we
still anticipate the Fed may hike again...already in March as
Trump moves forward with an aggressive stimulus program. That
will bring U.S. rates higher." 
    Net short contracts on the euro, meanwhile, fell to 65,823,
the lowest level since late June. The outlook on the euro,
however, remained less upbeat than the dollar.
    The European Central Bank is still doing massive
quantitative easing and the region still faces considerable
political risks. 
    Next week will be crucial for the euro as the ECB meets and
its president Mario Draghi holds a press conference. ECB minutes
showed that the December meeting's decision to extend
quantitative easing to the end of the year was met with some
resistance by a few ECB members. 
    The Mexican peso short contracts, on the other hand, rose in
the latest week to 71,776, the largest since early October. The
peso has been the most sensitive to comments from Trump. His
continued assault on Mexico in terms of immigration jobs has
damaged the peso, which has fallen to record low. 
    The Reuters calculation for the aggregate U.S. dollar
position is derived from net positions of International Monetary
speculators in the yen, euro, British pound, Swiss franc and
Canadian and Australian dollars.
    
    Japanese Yen (Contracts of 12,500,000 yen) 
 $8.621 billion
         10 Jan 2017            Prior week
         week             
 Long             26,041            37,962
 Short           105,880           124,726
 Net             -79,839           -86,764
 
EURO (Contracts of 125,000 euros)
 $8.683 billion
         10 Jan 2017            Prior week
         week             
 Long            134,747           129,701
 Short           200,570           199,757
 Net             -65,823           -70,056
 
POUND STERLING (Contracts of 62,500 pounds sterling)
 $5.01 billion
         10 Jan 2017           Prior week
         week             
 Long             56,742           55,482
 Short           122,573          120,224
 Net             -65,831          -64,742
 
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $1.752 billion
         10 Jan 2017           Prior week
         week             
 Long             10,012           11,813
 Short            24,258           25,252
 Net             -14,246          -13,439
 
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $0.6 billion
         10 Jan 2017           Prior week
         week             
 Long             28,405           39,546
 Short            36,340           43,417
 Net              -7,935           -3,871
 
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $0.283 billion 
         10 Jan 2017           Prior week
         week             
 Long             40,782           47,948
 Short            44,630           51,204
 Net              -3,848           -3,256
 
MEXICAN PESO (Contracts of 500,000 pesos)
 $1.646 billion
         10 Jan 2017           Prior week
         week             
 Long             23,878           22,279
 Short            95,654           87,915
 Net             -71,776          -65,636
 
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $0.976 billion 
         10 Jan 2017           Prior week
         week             
 Long             22,989           25,522
 Short            36,949           36,935
 Net             -13,960          -11,413
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu
Nomiyama and Lisa Shumaker)

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