BRASILIA- Funds and speculators on U.S. futures markets are their most bullish on the Brazilian real in more than four years, data showed, attracted to the currency by the recent surge in 2021 interest rate and economic growth expectations.

The near-record positioning, however, suggests the real will struggle to rally further from here, as the supportive growth outlook and rate differentials have already been factored into its price, analysts say.

Commodity Futures Trading Commission data late on Friday showed that funds increased their aggregate net long real position to 22,220 contracts in the week ended July 13 from 21,305 contracts the week before.

That is the largest net long position since late February 2017 and close to the high of 26,050 contracts from the same month, a record since the CFTC Brazilian real contract was launched in 2011.

To go long a financial asset is to effectively bet that it will rise in value, and to go short is the opposite.

Strategists at Morgan Stanley reckon the real is starting to look expensive.

"We maintain a preference for BRL over the other regional currencies, but we note that heavier positioning is likely to magnify the currency's sensitivity to increasing political noise, so we remain sidelined," they wrote in a note on Sunday.

The real rallied through the 5.00-per-dollar level late last month from close to 6.00 per dollar in March, but has since pulled back. On Monday morning it was changing hands at 5.18 per dollar.

Economists increased their 2021 economic growth and interest rate forecasts to 5.3% and 6.75%, respectively, according to a weekly central bank survey on Monday.

(Reporting by Jamie McGeever; Editing by Paul Simao) ((jamie.mcgeever@thomsonreuters.com; +55 (0)11 97189 3169; Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net))