U.S. dollar net longs hit highest since early March 2020 - CFTC, Reuters estimate

© Reuters. FILE PHOTO: A U.S. dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - U.S. dollar net longs rose in the latest week to their highest since early March last year, according to Reuters calculations and Commodity Futures Trading Commission data released on Friday.

The value of the net long dollar position climbed to $3.08 billion in the week ended Aug. 10, from net longs of $2.11 billion the previous week. U.S. dollar positioning has been net long for four straight weeks after staying net short for 16 months.

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

In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net long position of $2.993 billion this week, compared with net shorts of $1.92 billion the week before.

"Speculative traders have held a modest, aggregate U.S. dollar long position for a month now, but positioning remains rather light and somewhat non-committal," wrote Shaun Osborne, chief FX strategist, at Scotiabank in a note after the CFTC data.

"This may reflect light trading conditions through the northern hemisphere summer or a desire to wait for more evidence in support of building U.S. dollar longs further. Either way, there is clearly some room for the position to grow."

The dollar has gained about 0.4% over the last two weeks, bolstered by safe-have bids arising out of nagging worries about the Delta coronavirus variant and growing expectations that the Federal Reserve is getting ready to announce a tapering of its asset purchases soon.

A reduction in the Fed's asset purchases is viewed as a step toward a tighter monetary policy and is considered a positive scenario for the dollar.

In the cryptocurrency market, bitcoin net shorts fell to 1,104 contracts in the week ended Aug. 10, from net shorts of 1,290 the previous week. This week's bitcoin shorts were the smallest since mid-May.

Bitcoin has made a recovery the last two weeks, hitting just shy of $48,000 on Friday, its highest since mid-May, after months of sluggish performance. Bitcoin has surged more than 50% from its July 20 low.

A wave of global regulatory crackdown on the crypto sector has weighed on bitcoin and other cryptocurrencies this year. Since hitting an all-time high of just under $65,000 in mid-April, bitcoin has fallen about 32%.