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
chana.schoenberger@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires