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UPDATE 1-Speculators' net short bets on dollar at near 4-month low -CFTC, Reuters

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By Saqib Iqbal Ahmed

NEW YORK, Nov 13 (Reuters) - Speculators' net short bets on the U.S. dollar slipped to the smallest position in nearly four months, according to calculations by Reuters and Commodity Futures Trading Commission data released on Monday.

The value of the dollar's net short position, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was $1.92 billion, in the week to Nov. 7.

That compares with a net short position of $3.37 billion the previous week. To be short a currency means traders believe it will fall in value.

In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the U.S. dollar posted a net short position valued at $3.69 billion, down from $5.61 billion a week earlier.

"The drivers behind this is the growing market optimism that we will get a tax bill passed, which would have positive consequences for the dollar," said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investment Management in Boston.

Investors are focused on lawmakers' efforts to overhaul the U.S. tax code and are closely tracking developments around the tax bill after U.S. Senate Republicans last week unveiled a new plan that differed from the House of Representatives' version.

Members of the U.S. House of Representatives and Senate were debating their respective plans this week before heading home for the U.S. Thanksgiving Day holiday.

Investors' expectations for the dollar to benefit from U.S. corporations repatriating profits has also helped boost sentiment in favor of the dollar, Upadhyaya said.

Both the Senate and House tax plans include a one-time repatriation tax. Meanwhile, the net short position on the Japanese yen was at 127,848 contracts, or the largest since January 2014 and the net short position on the Swiss franc grew to 25,110 contracts, the largest since December 2016.

The short position in low yielding currencies, the Japanese yen and Swiss franc, have grown over the last few weeks as Treasury bond yields climbed.

Investors' preference for borrowing at low rates in one currency to invest in another with higher returns creates selling pressure on low-yielding currencies such as the yen and the Swiss franc.

"It's definitely a rates play," said Upadhyaya.

Japanese Yen (Contracts of 12,500,000 yen) $14.018 billion

Nov. 10, 2017 Prior week

week Long 54,336 54,585 Short 182,184 173,454 Net -127,848 -118,869 EURO (Contracts of 125,000 euros) $-12.375 billion

Nov. 10, 2017 Prior week

week Long 181,335 173,670 Short 95,880 101,573 Net 85,455 72,097 POUND STERLING (Contracts of 62,500 pounds sterling) $0.757 billion

Nov. 10, 2017 Prior week

week Long 50,403 65,482 Short 59,601 64,237 Net -9,198 1,245 SWISS FRANC (Contracts of 125,000 Swiss francs) $3.139 billion

Nov. 10, 2017 Prior week

week Long 19,568 21,001 Short 44,678 41,672 Net -25,110 -20,671 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $-3.984 billion

Nov. 10, 2017 Prior week

week Long 75,460 84,309 Short 24,571 26,470 Net 50,889 57,839 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $-3.473 billion

Nov. 10, 2017 Prior week

week Long 75,144 85,422 Short 29,707 33,814 Net 45,437 51,608 MEXICAN PESO (Contracts of 500,000 pesos) $-1.488 billion

Nov. 10, 2017 Prior week

week Long 88,731 87,220 Short 31,756 31,974 Net 56,975 55,246 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $0.772 billion

Nov. 10, 2017 Prior week

week Long 18,943 21,763 Short 30,130 27,470 Net -11,187 -5,707 (Reporting by Saqib Iqbal Ahmed; Editing by Meredith Mazzilli)

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 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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