Modest changes in specs positioning - TDS

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Bali) - The TDS FX Team reviews the CFTC commitments of traders report for the week ending Tuesday, July 8th, noting that changes were modest for the most part.

Key Quotes

Changes in positioning by speculative investors and CTA-type accounts during the week ending on July 8th were modest for the most part. The latest Commitments of Traders Report from the CFTC shows the largest change relative to the previous week was a 14.8k contracts reduction in net GBP longs. In all, net longs on sterling amount now to +41.6k contracts.

CAD saw an extension of net longs to the tune of +7.6k contracts, which yielded the most bullish position in the currency since February 2013 with a total of 10.3k net longs. This might reflect expectations that the Bank of Canada will sound less cautious next week following the upside surprise in May's inflation. We believe those expectations will be disappointed.

NZD was the other commodity currency favored by investors during the intervening week. Net NZD longs were ramped-up by 5.4k contracts to a total of 14.4k. AUD received the opposite treatment, as net longs were scaled back to 36.6k from 38.9k prior.

JPY saw a 7.7k extension of net shorts to -66.4k contracts. This, nonetheless, remains within the lower range of net shorts observed on the currency over the last two years. EUR, on the other hand, experienced a minor change in positioning by specs, with modest short covering from -60.8k to -59.3k contracts. Ditto for CHF, which registered short covering equivalent to 0.4k contracts for a total net short of -6.8k contracts.

Lastly, positioning in MXN was once again little changed from the previous week with a total of 68.8k net longs, retaining the top position for bullish bets from speculative investors.

In all, the changes noted above imply a net long position in the USD equivalent to $US6.4bn, an increase of $US1.2bn from the previous week.

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