Dec 26 (Reuters) -ICE cotton futures edged up on Tuesday, supported by a weaker dollar and upbeat sentiment in the stock market, as the holiday-trimmed week drew thin trading volumes across the board.
* Cotton contracts for March CTc1 rose 0.22 cent, or 0.28%, at 79.98 cents per lb at 11:09 a.m. ET (1609 GMT). It was set to rise for a second session.
* Prices were supported by a 0.1% weaker U.S. dollar index, making the natural fiber less expensive for buyers holding other currencies. USD/
* "Wall Street thinks that things are going to be fine ... some of that enthusiasm may be going over into cotton market as well," Kansas-based commodity analyst Sid Love said.
* Wall Street's main indexes kicked off the last week of the year on a positive note, on growing bets of early rate cuts by the Federal Reserve lifted investor sentiment. .N
* Investors awaited the U.S. Department of Agriculture's (USDA) weekly export sales report on Friday, scheduled a day later this week due to the Christmas holiday.
* In the week to Dec. 19, speculators increased their net short position by 6,182 contracts to 7,565, data from the Commodity Futures Trading Commission showed on Friday. CFTC/
* Oil jumped over 2% to their highest in almost a month. Higher oil prices make polyester, a substitute for cotton, more expensive. O/R
Reporting by Daksh Grover in Bengaluru