Net short US dollars totalled $1.03 billion in the week ended December 11, from a net long position of $920.79 million the previous week. To be short a currency is to bet it will decline in value, while being long is a view its value will decline. Investors had sold the dollar in the run-up to Wednesday's Federal Reserve decision to undertake more asset purchases to boost a sluggish US economy. Further monetary stimulus is viewed as negative for the greenback as it involves flooding the market with dollars, depressing the currency's value.
The dollar index this week fell 1.1 percent, its worst weekly loss since mid-September. Yen shorts, meanwhile, hit 94,401 contracts, a more than five-year peak. Short yen bets are nearing extreme levels, suggesting there may be a rally in the Japanese currency in the near term as investors attempt to lighten heavy yen positioning. The yen so far this year has fallen nearly 8 percent, on track for its worst yearly performance since 2005. Euro shorts, on the other hand, continued to fall this week, to 31,623 contracts from 32,795 the previous week.