Jan 2 (Reuters) -ICE cotton futures fell over 1% on Tuesday, pressured by a stronger dollar, with traders raising their net short position to its most in six weeks.

* Cotton contracts for March CTH4 fell 1.07 cents, or 1.3%, at 79.94 cents per lb at 11:44 a.m. ET (1644 GMT). The contract was set to snap a five-session winning streak and post its biggest fall in two weeks.

* The dollar index rebounded from five-month lows, making cotton more expensive for buyers holding other currencies.USD/

* In the week to Dec. 26, speculators increased their net short position by 2,145 contracts to 9,710, data from the Commodity Futures Trading Commission showed on Friday, marking their biggest net short position since the week to Nov. 14. CFTC/

* "The equity markets aren't helping at all, but it's the simple fact that almost all of our demand is coming from one place in China, and we're not seeing anything else from any other clients," said Louis Barbera, partner and analyst at VLM Commodities.

* U.S. stocks fell as Treasury yields climbed after investors tempered expectations around interest-rate cuts this year. .N

* The USDA's weekly export sales report on Friday showed exports of 231,000 running bales were at their highest level for the marketing year 2023/2024. More than half of those exports were to top consumer China. EXP/COT

Reporting by Anjana Anil in Bengaluru; Editing by Tasim Zahid