Hedge Funds Cut Bullish Dollar Bets in Longest Streak in 1 Year

Dollar Futures Positions

Hedge funds and other large speculators trimmed futures bets on dollar gains for a seventh straight week, the longest streak in a year.

The reduced positions coincide with the U.S. currency’s slump to an almost four-month low amid signs the economy is stalling.

“Less momentum in U.S. data and uncertainty as to whether that’s temporary or something more persistent” is partly responsible, Daniel Katzive, head of foreign-exchange strategy, North America, at BNP Paribas SA in New York, said by phone.

Speculators reduced net positions that profit from gains by the U.S. currency versus eight of its major peers to 247,552 contracts in the week through May 12, the least since September, according to Commodity Futures Trading Commission data compiled by Bloomberg. So-called net longs totaled 291,243 a week earlier.

Investors have been paring bets on U.S. currency strength as a string of worse-than-forecast releases casts doubt on the resilience of the American economy. The Federal Reserve is monitoring incoming reports to guide the timing of its first interest-rate increase since 2006.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against its major peers, fell 1.2 percent this week, its biggest loss in a month. The greenback has fallen more than 2 percent against the euro this week.

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