Dollar set for a bigger drop as speculators flee longs
Aug 26 (Reuters) -FX speculators continued to run away from theU.S. dollar well ahead of Federal Reserve Chair Jerome Powell's speech on Friday that led to another leg lower in the U.S dollar.
The speculative long position - derived from net contracts of International Monetary Market speculators in the euro, yen, pound, Swiss franc, Canadian and Australian dollars - shrank. For the week ending Aug. 20, the value of net long positions held by speculators shrank to $3.14 billion from $9.54 billion a week earlier.
The dollar fell after Powellgave an unambiguous signal that the long-anticipated U.S. interest rate cut would come in September.
The USD index, which tracks the dollar against a basket of six major currencies, collapsedto break the December 100.61 base. Fourteen-day momentum remains negative, reinforcing the overall bearish market structure and highlighting the underlying risk for the U.S. currency to drop further.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)
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