(The opinions expressed here are those of the author, a columnist for Reuters)

ORLANDO, Florida - Hedge funds and speculators continue to temper their optimism on the U.S. dollar, and are now holding the smallest net long position in the currency since March.

The question now is whether the decks have been cleared enough to begin rebuilding these bullish bets, or whether the U.S. economic outlook and the monetary policy path overseas will encourage funds to scale them back even further.

Friday's U.S. employment report, and subsequent spike in bond yields and paring back of Fed rate cut expectations, suggest the dollar selloff is running out of steam. Hawkish signals from the Fed's revised economic projections and Jerome Powell on Wednesday would likely cement that view.

"The power of the U.S. jobs data ... reinforces the risk of the Fed remaining on the sidelines for longer," MUFG analysts wrote on Friday.

However, growth concerns refuse to dissipate and before Friday's rebound, Treasury yields and the dollar were at two-month lows.

In addition, the Bank of Japan is tightening policy and the European Central Bank doesn't seem keen on embarking on a full-scale easing cycle. The dollar's relative appeal may not improve all that much

The latest Commodity Futures Trading Commission data show that speculators cut their net long dollar position against a basket of G10 and emerging market currencies to just under $11 billion in the week ending June 4 from $15.3 billion the week before.

That is around a third of the $32.6 billion wager on a stronger dollar from only six weeks ago. That was a five-year high too.

The value of funds' long dollar position against G10 currencies fell to $14 billion from $18.2 billion the prior week. That's also significantly down from a five-year high of $36.3 billion in late April.

A long position is essentially a bet that an asset will rise in value, and a short position is a wager its price will fall.

Recent dollar-selling has been particularly steady against the two major European currencies. The latest CFTC data show funds now hold their biggest net long euro position in three months and largest net long sterling position in two months.

The Japanese yen and Canadian dollar are the two currencies against which funds are holding historically large long U.S. dollar positions. They went in opposing directions last week.

Funds cut their net short yen position by 15% to $10.66 billion from $12.4 billion the week before. Two bouts of direct yen-buying intervention from Tokyo and the BOJ's policy 'normalization' have prompted funds to reduce their net short yen position by more than a quarter from April's 17-year high.

It's a different story with the 'loonie'. Funds increased their net short position in the week through June 4 to 91,639 contracts, a position now worth $6.7 billion. By both measures, that is the biggest bet against the currency in seven years.

(The opinions expressed here are those of the author, a columnist for Reuters)

(By Jamie McGeever; Editing by Christopher Cushing)