Speculators raised net long bets on the US dollar to $24.17 billion this week, increasing their positions from $22.45 billion last week, according to data from the Commodity Futures Trading Commission and calculations by Reuters. Net long bets on the dollar fell last week for the first time since October, but rebounded as currency speculators again took bullish positions on the future of the greenback in the last trading week of the year.

Analysts told Reuters they expect the dollar's strength to continue in 2017 with the greenback set to end this year up more than 3.5 percent against a basket of major currencies. However, a good deal of uncertainty remained about what the incoming administration of President-elect Donald Trump will bring and how much dollar appreciation it will tolerate. "Much depends on how the Trump presidency and the Chinese economy work out," said Marshall Gittler, chief market analyst for retail broker FX Primus. "In general, I expect the dollar to continue to gain."

Speculators also raised net short contracts on the Japanese yen for the ninth straight week to 87,009 contracts, the most since August 2015. Net short contracts on the euro were reduced substantially, with speculators holding the lowest number of net shorts on the continental currency since July. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.

Copyright Reuters, 2017