The value of the net short dollar position rose to $27.89 billion in the week ended May 25, from net shorts of $15.07 billion the previous week. U.S. dollar net short contracts rose for a sixth straight week.
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 broader measure of dollar positions that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net short position of $17.052 billion this week, compared with net shorts of $15.63 billion the week before.
Net short dollar positioning swelled again after it became clear that the Federal Reserve will keep its ultra-easy monetary policy stance for some time despite signs of rising inflationary pressure.
On Friday, data showed underlying inflation in the 12 months to April, as measured by the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, climbed to 3.1%, far above the Fed's 2% target.
The Fed has viewed rising prices as transitory amid a reopening economy that has seen increased COVID-19 vaccinations.
The U.S. central bank's view on inflation has stalled the rise in yields, weighing on the dollar.
Since late March, the dollar has lost nearly 4% of its value against a basket of currencies. It tracked the decline in yields during that period as well, with the benchmark U.S. 10-year yield dropping nearly 20 basis points since late March.
"Currency traders are turning more negative on the broader outlook for the U.S. dollar again," said Scotiabank in a research note released after the CFTC data.
The Canadian bank also pointed to the sharp increase in net gold longs, gaining $3.6 billion to return to late February levels, "in what is effectively another manifestation of broader U.S. dollar bearishness."
In the cryptocurrency market, bitcoin net shorts rose to 1,672 contracts from net shorts of 959 in the week ended May 18, which was the smallest net short since late March last year.
Bitcoin's gains have slowed this year, after China embarked on a crackdown on cryptocurrency trading and mining.
Investors also looked to other digital currencies such as ether, the digital token for the Ethereum blockchain, for crypto exposure.
Since hitting an all-time high just under $65,000 on April 14, bitcoin has fallen about 46%.
On Friday, bitcoin was down 7% at $35,920.
Japanese Yen (Contracts of 12,500,000 yen)
$5.765 billion
25 May 2021 Prior week
week
Long 24,163 24,965
Short 74,319 75,913
Net -50,156 -50,948
EURO (Contracts of 125,000 euros)
$-15.925 billion
25 May 2021 Prior week
week
Long 236,103 232,330
Short 132,103 132,472
Net 104,000 99,858
POUND STERLING (Contracts of 62,500 pounds sterling)
$-2.712 billion
25 May 2021 Prior week
week
Long 64,193 63,027
Short 33,534 38,127
Net 30,659 24,900
SWISS FRANC (Contracts of 125,000 Swiss francs)
$0.168 billion
25 May 2021 Prior week
week
Long 12,223 11,115
Short 13,426 15,380
Net -1,203 -4,265
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
$-3.715 billion
25 May 2021 Prior week
week
Long 84,183 82,026
Short 39,372 35,914
Net 44,811 46,112
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
$0.063 billion
25 May 2021 Prior week
week
Long 55,098 57,862
Short 55,907 54,860
Net -809 3,002
MEXICAN PESO (Contracts of 500,000 pesos)
$0.213 billion
25 May 2021 Prior week
week
Long 63,868 62,251
Short 72,366 72,369
Net -8,498 -10,118
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
$-0.62 billion
25 May 2021 Prior week
week
Long 24,446 23,624
Short 15,861 15,174
Net 8,585 8,450
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Leslie Adler and Sonya Hepinstall)
By Gertrude Chavez-Dreyfuss
