UPDATE 1-Speculators reduce bearish US dollar bets in latest week -CFTC, LSEG data

(Adds table, details, byline) By Gertrude Chavez-Dreyfuss NEW YORK, Jan 19 (Reuters) - Speculators' net short positioning on the U.S. dollar fell in the latest week, U.S. Commodity Futures Trading Commission and LSEG data released on Friday showed, reflecting the greenback's recovery as the rates market pared back expectations of easing in March by the Federal Reserve. Data showed that the value of net short dollar positions slid to $9.799 billion for the week ended Jan. 16, from $12.7 billion the previous week. U.S. dollar net shorts last week hit their largest since August. U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound, Swiss franc, Canadian, Australian and New Zealand dollars, Mexican peso, Brazilian real and Russian rouble. Further data also showed real money or institutional investors also reduced significant shorts on the dollar, while leveraged accounts or hedge funds pared net dollar longs. The dollar on Friday was on track to post a second weekly gain of 0.8%. A slew of generally solid U.S. economic data and recent comments from Fed officials have tempered expectations of an interest rate cut at the March policy meeting. Friday's University of Michigan's preliminary reading on the overall index of consumer sentiment, for instance, hit 78.8 this month, the highest reading since July 2021, compared with 69.7 in December and the 70.0 consensus estimate. The data came in the wake of decent labor market and retail sales data earlier this week, suggesting the economy remained stable. Several Fed officials, starting with Governor Christopher Waller on Tuesday, tempered market expectations that central bank will undertake early rate cuts this year. As a result, the U.S. rate futures market on Friday priced less than a 50% chance of a rate cut at the March meeting, down from as much 80% last week, according to LSEG's rate probability app. For 2024, futures traders are betting on five rate cuts of 25 bps each, compared with expectations of six last week. CFTC data also showed that the bulk of the speculative sentiment shift on the dollar was reflected in the large decline in net euro longs to 104,092 contracts. Institutional investors overall raised their net longs on the euro. JAPANESE YEN (Contracts of 12,500,000 yen) $4.804 billion 16 Jan 2024 Prior week week Long 44,180 41,364 Short 100,740 97,313 Net -56,560 -55,949 EURO (Contracts of 125,000 euros) $-14.149 billion 16 Jan 2024 Prior week week Long 204,294 208,473 Short 100,202 89,596 Net 104,092 118,877 POUND STERLING (Contracts of 62,500 pounds sterling) $-2.443 billion 16 Jan 2024 Prior week week Long 66,230 60,684 Short 35,299 39,950 Net 30,931 20,734 SWISS FRANC (Contracts of 125,000 Swiss francs) $0.542 billion 16 Jan 2024 Prior week week Long 10,627 11,044 Short 14,365 15,436 Net -3,738 -4,392 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $0.992 billion 16 Jan 2024 Prior week week Long 38,738 42,286 Short 52,126 49,666 Net -13,388 -7,380 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $3.15 billion 16 Jan 2024 Prior week week Long 45,812 47,326 Short 93,669 79,600 Net -47,857 -32,274 MEXICAN PESO (Contracts of 500,000 pesos) $-2.372 billion 16 Jan 2024 Prior week week Long 133,691 143,436 Short 52,089 54,997 Net 81,602 88,439 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $0.177 billion 16 Jan 2024 Prior week week Long 14,592 16,221 Short 17,474 17,988 Net -2,882 -1,767 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Leslie Adler and David Gregorio)