In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the US dollar posted a net short position valued at $5.433 billion, compared with $1.079 billion the week before. Net short US dollar contracts rose after declining for three straight weeks, underscoring negative sentiment on the greenback despite the prospect of higher US interest rates this year.
Speculators, meanwhile, pared back net short positions on bitcoin futures traded on Cboe Global Markets to 1,688 contracts this week, from 1,801 the previous week, CFTC data showed. Digital currency bitcoin has been on a roller-coaster ride the last few months. After hitting an all-time high just shy of $20,000 on December 17 on the Bitstamp platform, it plunged more than 40 percent in five days to a low of $11,159.93. That highlighted the volatility of an asset that has attracted interest from both individual and institutional investors.
Bitcoin has since stabilized and on Friday was trading up more than 10 percent to $16,692. For the whole of 2017, bitcoin had risen more than 1,300 percent, the most increase in value by any asset. "There will be some betting big that 2017 can't repeat itself for bitcoin and that there will be a pullback - although at present they seem to have egg on their faces," said Charles Hayter, founder of industry website Cryptocompare in London.
Hayter though expects bitcoin to remain volatile this year, but sees the entire cryptocurrency market expanding with new investment instruments focused on the space. In the case of the dollar, sentiment remained negative, with analysts seeing little upside in the currency because all the good news such as the rate increases and the US tax plan have already been priced in by investors.
Some analysts also have little faith in the Federal Reserve being able to push through with its forecast of three rate hikes this year given persistently low inflation. For the week, the dollar index ended down 0.1 percent, after posting losses of 10 percent in 2017.