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Forex pairs in this Article » EUR/USD, USD/CHF, GBP/USD, USD/JPY (Bali) - According to CFTC futures data, the week through Dec 10th saw speculative currency accounts gain further conviction in directional trades after five months of reduced exposure, notes the FX Team at TD Securities.

Key Quotes

"Total outstanding contracts jumped to the highest level since June (to 311k from 270k), although that still remains well below the level seen in the first half of the year (400-500k)."

"Investors trimmed exposure to the USD against most currencies except the CAD and the AUD. Overall, the implied USD long position was reduced only modestly to USD17.5bn as of Tuesday, from 18.9bn in the week prior."

"The jump in CAD short positions was the largest adjustment by value over the week, with net short contracts expanding to 57.5k contracts from 41.6k. That’s the largest net short since April, although well off the peak at that time (-76k)."

"Speculators added notably to EUR exposure, increasing net long contracts to 15.9k from 9.3k over the week. Meanwhile, GBP positioning was held steady at 18.4k contracts."

"The very persistent and extreme short position in the JPY was pared slightly to 129.7k contracts, from 133.4k as of Tuesday. We continue to point out that this level of one-sided positioning is vulnerable to a short squeeze with a decent trigger."

"Among the commodity currencies, investors continues to show a preference for the NZD and this week’s hawkish RBNZ meeting suggests that should remain the case for some time still. NZD net longs were increased to 8.6k contracts from 7.6k ahead of the RBNZ, while AUD net shots grew to 45.9k from 44.3k."

"On the back of some positive Swiss data recently and ahead of the SNB meeting, the net CHF long position was increased to 12.0k from 6.5k—the largest net long since January."
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