By Chana R. Schoenberger
Speculative investors on the Chicago Mercantile Exchange this week held their smallest net position betting that the dollar will continue to rise since May 1, government data showed Friday.
Traders held a net $12.8 billion in bets that the dollar will appreciate against other major currencies, as of July 31, according to the Commodity Futures Trading Commission's weekly report on the commitments of traders. That position was 35% lower than the previous week's bets.
The dollar's resilience, which has grown as the euro zone's sovereign-debt crisis sparked worldwide economic turmoil, is being tested as investors worry that the U.S. economy is itself unsound.
For the euro, traders were slightly less convinced that the common currency will fall, betting a net $21.4 billion, or 138,994 contracts, on this position, down 9% from the previous week.
The yen had a net $5.2 billion position betting that the Japanese currency will rise against the dollar, totalling a net 32,254 contracts. Those holdings were 29% higher than the week before.
Speculators held a net $2.4 billion in wagers that the Swiss franc will decline, or 18,808 contracts. That represented a 26% decrease from the prior week.
The Australian and New Zealand dollars all held investors' confidence this week, with traders adding to their bets that these dollar-bloc currencies will rise against the U.S. dollar. The Australian dollar had the stronger position, with traders adding 45% this week to a net $3.9 billion bet on the currency's appreciation.
For the Canadian dollar, traders changed their view, placing a net positive bet on the currency's prospects worth $1.2 billion.
The British pound saw a pessimistic bet, with traders holding a net $177 million in wagers that sterling will fall, a 38% smaller position than the previous week.
Traders watch the weekly CFTC data for clues to what positions hedge funds are holding. The CFTC's weekly report shows speculative investors' positions in major currencies held against the dollar. It viewed the markets as of Tuesday.
-Stephen L. Bernard contributed to this article.
Write to Chana R. Schoenberger at [email protected]
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