November 26, 2018 / 9:23 PM / 9 months ago

Speculators raise net long U.S. dollar bets in latest week: CFTC, Reuters

NEW YORK (Reuters) - Speculators increased net long bets on the U.S. dollar in the latest week, according to calculations by Reuters and Commodity Futures Trading Commission (CFTC) data released on Monday.

FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration/File Photo

The value of the net long dollar position was $28.49 billion in the week ended Nov. 20, up from $27.11 billion the previous week. Speculators have been net long on the dollar for 23 straight weeks, after being short for 48 consecutive weeks.

U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.

In a broader measure of dollar positioning <0#NETUSDFX=> that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the U.S. dollar posted a net long position of $28.98 billion, compared with $27.89 billion a week earlier.

The dollar gained ground last week on safe-haven bids as risk appetite worsened with a sell-off in stocks and decline in oil prices. The drop in oil prices was particularly worrisome as it suggested slowing global growth.

One of the focal points this week is a scheduled meeting between U.S. President Donald Trump and Chinese President Xi Jinping that may be their last chance to broker a ceasefire in an increasingly dangerous trade war. It could be an opportunity for the dollar to advance again as some analysts believe it is unlikely that Trump and Xi will reach a deal.

“Any signs that the United States may escalate the trade war with China further will probably lend further support to the greenback,” said Erik Nelson, currency strategist, at Wells Fargo in New York.

“Accordingly, we see risks as tilted toward modest dollar gains over the next few days.”

So far this year, the dollar index is up 5.4 percent.

In the cryptocurrency market, speculators’ net short position on bitcoin Cboe futures totaled -1,199 contracts <0#1CFTC1330E1> in the latest week, from -1,185 contracts previous week, data showed.

Bitcoin has been in a prolonged market slump since the beginning of the year. It plunged more than 14 percent on Monday as sentiment soured over intense regulatory scrutiny and the persistent lack of market infrastructure.

On Monday, bitcoin was down 14.8 percent from last Friday, and 75 percent so far this year, at $3,623.49 on the Bitstamp platform.

“In theory, if the course of bitcoin continues to decline down to $3,500 and below, we will see a significant decrease of network capacity which could eventually lead to a technological collapse,” said analysts at online FX broker FxPro.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Brown and Sonya Hepinstall

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