USD net shorts tumbled from 148,961 contracts on May 17 to 102,037 on May 24, a 19-week low. Over the past three weeks, some 155,300 short positions have been covered.
The dollar peaked against a basket of currencies including the euro, yen and pound on May 24, suggesting that those wishing to close their short positions have now done so, said RBC strategist David Watt in a note.
Sentiment around the pound remains volatile, with positions seeing a 47,000-contract swing from long to short over three weeks. Net short positions on May 24 amounted to 14,143 contracts, compared with 928 the previous week. Net longs on the yen fell from 15,373 to 8,006.
The number of long contracts on the euro fell to 19,100, compared with 41,600 a week earlier. The number of long positions on the euro has dropped by 80,000 over the past three weeks. The euro has declined in recent weeks against the dollar, though it has rebounded in the past few days amid rising concern over prospects for US growth.