Speculators' bets against U.S. dollar rise to over one-year high

[March 24, 2018]   NEW YORK (Reuters) - Speculators' net short dollar bets rose to the highest in more than a year in the latest week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

The value of the net short dollar positions, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was $21.99 billion in the week to March 20.

That compares with a net short position of $14.61 billion the previous week.

To be short a currency means traders believe it will fall in value.

The dollar has been under pressure in recent weeks due to fears about trade protectionism with the imposition of U.S. tariffs on steel and aluminum.

On Friday, China urged the United States to "pull back from the brink" as President Donald Trump's plans for tariffs on up to $60 billion in Chinese goods moved the world's two largest economies closer to a trade war.

The dollar index <.DXY>, which measures the greenback against a basket of six other major currencies, was down 0.4 percent at 89.498, on Friday. For the week, the index lost nearly 1 percent, and slipped close to a one-month low.

The net short positioning on the Japanese yen shrank to 21,999 contracts, the smallest since November 2016, from a net short position of 79,539 contracts, last week, the data showed.

The unwind in short positions comes as the yen has made rapid strides against the greenback, and follows years of the Japanese currency being used as a funding currency to buy high yielders.

The yen, often viewed as a safe-haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan's current account surplus, rose to a 16-month high against the dollar on Friday.

Meanwhile, speculators' net short position on bitcoin Cboe futures shrank to 1,370 contracts in the latest week, from 1,716 contracts the previous week, the data showed.

Bitcoin on Friday was down 0.86 percent at $8,629.73 <BTC=BTSP> on the Luxembourg-based exchange Bitstamp.

Bitcoin has lost nearly 40 percent of its value so far this year, hurt by increased scrutiny from regulators around the world led by the Securities and Exchange Commission. Other cryptocurrencies have tumbled in value as well.

(Reporting by Saqib Iqbal Ahmed; Editing by Susan Thomas and James Dalgleish)

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