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UPDATE 1-Euro net longs hit largest in more than three years -CFTC, Reuters

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(Adds table, byline, analyst comments details on euro, yen, dollar contracts)

By Gertrude Chavez-Dreyfuss

NEW YORK, May 19 (Reuters) - Net long positioning on the euro rose to its highest in more than three years, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

Euro net long contracts for the week ended May 16 were at 37,604, the largest since March 2014.

Recent improvements in euro zone inflation, key sentiment gauges and the overall solid performance in the region's economy in the first quarter have raised expectations the European Central Bank will adjust its language at its next Governing Council meeting in June to reflect the improved backdrop, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

For the month of May so far, the euro has risen nearly 3 percent, on track for its best monthly performance since March 2016.

Net long positions on the U.S. dollar, meanwhile, increased for the first time in four weeks, data showed.

The value of the dollar's net long position rose to $13.5 billion in the week ended May 16, from $11.0 billion the previous week.

Despite the increase in net long dollars this week, the greenback remains under pressure amid U.S. political risk. The market remains focused on the political instability in Washington and growing uncertainty over the future of the U.S. President Donald Trump's administration.

"With those who were heavily optimistic over Trump's proposed fiscal policies now having second thoughts amid this uncertainty, the dollar could become a seller's best friend," said UK-based Lukman Otunuga, FXTM research analyst.

So far this month, the dollar index has been down nearly 2 percent.

Japanese yen net shorts, meanwhile, rose to 60,008 contracts, the largest since the third week of March.

The Reuters calculation for the aggregate U.S. dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars. Japanese Yen (Contracts of 12,500,000 yen) $6.632 billion

16 May 2017 Prior week

week Long 41,963 42,635 Short 101,971 78,942 Net -60,008 -36,307 EURO (Contracts of 125,000 euros) $-5.209 billion

16 May 2017 Prior week

week Long 164,234 155,581 Short 126,630 133,182 Net 37,604 22,399 POUND STERLING (Contracts of 62,500 pounds sterling) $2.664 billion

16 May 2017 Prior week

week Long 48,369 44,910 Short 81,364 91,708 Net -32,995 -46,798 SWISS FRANC (Contracts of 125,000 Swiss francs) $2.683 billion

16 May 2017 Prior week

week Long 3,946 8,480 Short 25,108 23,676 Net -21,162 -15,196 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $7.204 billion

16 May 2017 Prior week

week Long 39,130 47,412 Short 137,130 133,627 Net -98,000 -86,215 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $-0.471 billion

16 May 2017 Prior week

week Long 52,244 56,471 Short 45,900 30,687 Net 6,344 25,784 MEXICAN PESO (Contracts of 500,000 pesos) $-1.879 billion

16 May 2017 Prior week

week Long 92,686 92,514 Short 22,632 22,611 Net 70,054 69,903 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $0.823 billion

16 May 2017 Prior week

week Long 11,918 12,070 Short 23,872 22,856 Net -11,954 -10,786


(Reporting by Gertrude Chavez-Dreyfuss; editing by Diane Craft)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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