IMM short contracts swell to $13.2 bln

Net dollar short positions held by International Money Market currency speculators swelled to 96,751 contracts worth $13.2 bln in the week through Aug. 1 — six times the $2.2 bln worth of net dollar shorts held the prior week.The outlook for more credit tightening by the European Central Bank was reinforced by comments from ECB executive board member Lorenzo Bini Smaghi. He told the Italian newspaper Il Sole 24 Ore that euro zone rates were still “very accommodating” even after the ECB raised to 3.0% last week and the process of adjusting interest rates will continue in coming months. Traders said the U.S. currency may find support in the near term if market players start unwinding some of the huge short dollar positions.