U.S. Dollar net longs slide to five-week low -CFTC, Reuters data

NEW YORK (Reuters) -Speculators’ net long bets on the U.S. dollar fell to their lowest level since late September, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.

The value of the net long dollar position was $19.51 billion for the week ended Nov. 2, down from net longs of $20.07 billion in the previous week. U.S. dollar net long positioning has declined for four straight weeks.

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

In a wider measure of dollar positioning, which includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian rouble, the greenback posted a net long position of $19.303 billion this week, slightly down from $19.75 billion in the prior week.

“Investors trimmed their bullish bets on the U.S. dollar … ahead of the Federal Reserve’s policy decision on Wednesday,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

But he noted that the dollar’s net long positioning remained fairly substantial, which “reflects solid bullish sentiment in the greenback as markets look to the beginning of the Fed’s hiking cycle.”

The dollar, however, fell on Wednesday as the Fed’s policy statement was viewed as dovish by market participants.

The Fed did announce a reduction of asset purchases to be implemented later this month, but it stuck to its long-held view that the surge in inflation is transitory.

The dollar index ended the week little changed, as losses seen after the Fed statement were offset by gains following a strong U.S. job report for October.

On the year, the dollar has gained 4.7%.

The euro, meanwhile, saw a sharp reduction in net shorts to -6,138 contracts, equivalent to nearly $900 million. Also this week, European Central Bank President Christine Lagarde pushed back against market bets that price pressures would trigger an interest rate hike as soon as next year.

Europe’s single currency has so far been a laggard this year, down 5.3% in 2021.

In cryptocurrencies, bitcoin net shorts narrowed to -1,612 contracts this week, from a record -4,412 contracts the previous week.

Since hitting an all-time peak of $67,016.50 on Oct. 20, bitcoin has fallen 8.3%.

That said, continued optimism remains about bitcoin amid news on cryptocurrency adoption by banks, growth of nonfungible tokens on virtual gaming platforms, and launch of bitcoin futures-based U.S. exchange-traded funds.