U.S. dollar net longs shrink in August, but bitcoin gains

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U.S. dollar net longs shrink in August, but bitcoin gains

New York - The Reuters data and Commodity Futures Trading Commission data declined to coincide with the second week of U.S. dollar net longs, according to Reuters calculations and analysts on Friday.

The value of the net long dollar position declined to $1.06 billion in the year ended August 17, from $3.08 billion in the previous week. The U.S. dollar positioning has been net short for five consecutive weeks after staying net long for 16 months.

U.S. dollar positioning was derived from international market contracts of net speculators in the Italian yen, British currency, Swiss franc and Swiss franc, as well as the Canadian and Australian currencies.

In a broader measure of dollar positioning that includes net contracts on the Brazilian currency, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net long position of $796 million, down from $2.993 billion in the previous week.

Despite the shrink in U.S. dollar net long position, the greenback remained supporting while Delta coronavirus variant concerns and expectations that the Federal Reserve could taper asset purchases by the end of the year.

The dollar posted a gain of 1% this week, the most in two months.

The large dollar positioning still remains relatively noncommittally small bullish, Shaun Osborne, chief FX strategist at Scotiabank, wrote in a report after the CFTC data.

The strong performance in the U.S. dollar in the week 6 to Friday period, not included in the data of this report, would nevertheless suggest that next week's figures will see a move in the U.S. Dollar position in the opposite direction, he added.

The largest positioning change is in the Euro, with net longs rising this week to 57,640 contracts, from 33,857 previously.

The bitcoin market has closed to 726 Net short contracts from the previous week of Aug. 17 to net short contracts of 1,104 in the previous week. This week's bitcoin short were the largest since February 20th, 2020.

Bitcoin continues to recover from the deep depression of the past few months. On Friday, it hit a three month high of $49,163 in the uk economy. From a six-month low in June, bitcoin has gained 67% of its value against USD.

Still, the prospect of public scrutiny across the global crypto sector has cast a somewhat dark shadow on bitcoin's outlook and the overall crypto sector.