US dollar net length rises to highest since mid-June 2019 – CFTC, Reuters data

FILE PHOTO: A package of US$5 bills is inspected at the Bureau of Engraving and Printing in Washington
FILE PHOTO: A package of US$5 banknotes is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015. REUTERS / Gary Cameron

December 3, 2021

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – Speculators’ long-term net positioning in the U.S. dollar spiked in the latest week to its highest level since mid-June 2019, according to Reuters calculations and data by Reuters. The US Commodity Futures Trading Commission announced on Friday.

The value of a long dollar net long position was $23.99 billion for the week ended November 30, up from a net buy of $22.11 billion the previous week. The US dollar’s net long positioning rose for the second straight week.

The US dollar positioning is derived from the net contracts of speculators on the International Money Market in Japanese yen, euros, British pounds, Swiss francs, as well as Canadian and Australian dollars.

In a broader measure of the dollar’s position, which includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback registered a net long position of 24,435 billion dollars this week, from 21.964 billion dollars last week.

The US dollar’s net length rose after Federal Reserve Chairman Jerome Powell delivered hawkish testimony earlier this week despite the emergence of a highly transmissible coronavirus variant Omicron.

“Compared to all the currencies mentioned in this report, only the yen saw an improvement in its position against the dollar as investors were able to turn to the safety of it comes amid heightened risk aversion to the spread of the Omicron COVID-19 variant,” Scotiabank said in its report following the release of CFTC data.

Net prices against the Japanese yen fell to 78,866 contracts this week.

In remarks to Congress, Fed’s Mr. Powell said inflation risks had increased and suggested dropping the term “temporary” to describe the rise in prices. He also pushed for a reduction in Fed asset purchases.

The dollar index hit its highest level since July 2020 last week, before ending broadly unchanged this week.

Jane Foley, head of forex strategy, at Rabobank in London, said the dollar is unlikely to rise any further.

“While Powell’s hawkish tone this week carries the risk that the Fed could raise rates twice next year, the market has already priced in this,” she added.

In crypto, net short positions in bitcoin futures spiked to 1,691 contracts, after falling to as low as 160 contracts last week, the smallest since mid-January 2019.

As with many risky assets, bitcoin has been hit by worries about the Omicron variant.

Since hitting an all-time high of $69,000 on November 10, bitcoin has dropped more than 25%, with some market participants suggesting that the world’s largest cryptocurrency has entered a bear market. .

On Friday, bitcoin hit its lowest level since October 10 and last fell 4.7% at $53,897.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Sonya Hepinstall and Amy Caren Daniel) US dollar net length rises to highest since mid-June 2019 – CFTC, Reuters data

Bobby Allyn

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