“Commodity Futures Trading Commission(CFTC)” Data shows US dollar long bets fall

August 8, 2016

Here is the Commodity Futures Trading Commission (CFTC) covering data up to August 2.

This article is originally referred from iForex News

US dollar long bets fell to $12.79 billion from $13.66 billion against the major currencies during the previous week, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to August 2. Disappointing reports after the anticipated FOMC decision to leave the interest rates unchanged lowered expectations of an interest rate hike this year, leading to US dollar weakening and fall in long bets on dollar.

The second quarter GDP growth came in at just 1.2% instead of an expected 2.6%, adding to concerns US economic growth is faltering. Other economic data also indicated growth is not accelerating. Personal consumption expenditure index, personal spending and personal income were flat in June, while durable goods orders and construction spending fell, and ISM Manufacturing index declined in July.

While Federal Reserve has embarked on a path to tighten monetary policy, policy makers have been forced to push back rate hikes due to tepid economic recovery plagued by low inflation. And data indicate no change in recovery dynamics with inflation stagnant. As is evident from the Sentiment table, sentiment deteriorated for Canadian dollar, British Pound and Swiss franc as investors cut US bullish bets. Australian dollar and Canadian dollar are now the two major currencies still held net long against the US dollar after the net position in Swiss franc futures turned negative.

The bearish euro sentiment improved as the net short position in euro narrowed by $0.8bn to $14.6 bn. The net short position in euro fell as investors cut the gross longs by 4677 contracts and covered the shorts by 13174 contracts respectively. The British Pound sentiment continued to deteriorate as the net short rose by $0.27bn to $6.8 billion. The net short position in British Pound widened as the gross longs were increased by 3556 contracts and the shorts were increased by 5499. The bullish Japanese yen sentiment intensified with the net long position in Japanese yen rising by $0.9bn to $5.16 bn. Investors built the gross longs and cut the shorts by 2501 and 4241 contracts respectively.

The sentiment deteriorated for the Canadian dollar with the net longs falling by $0.4bn to $1.35 billion. Investors cut the gross longs and built the shorts. The bullish sentiment was essentially unchanged for the Australian dollar with net longs rising by just $23 million to $2.38 billion. Investors built the gross longs and covered the shorts. The sentiment turned bearish for the Swiss franc with the $120 net long position flipping to a net short of $222 million. Investors reduced both the gross longs and the shorts.

cftc sentiment vs exchange rate net long and short positions

weekly change of net long short ratio

Original Source: iForex News

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