USD Net Longs Decline Ahead of Fed's Decision

The latest report by Commodity Futures Trading Commission (CFTC) covering data up to March 17 showed that US dollar net long positions declined from $43.38 billion the previous week to $38.58 billion against the major currencies. The decline in aggregate long US dollar position ahead of Fed’s decision on March 18 indicates investors anticipated Fed’s dovish stance on tightening the monetary policy. As is evident from the CFTC Sentiment table another notable change is the improved sentiment towards Swiss franc, which is now held net long against the US dollar while every other currency is still held net short against the USD.

Euro and British Pound extended their net short positions. Euro bearish sentiment continued to build for the second week as euro net short positions widened by $1.45bn to -$25.7bn. Euro still makes the bulk of net short positions against US dollar. The British Pound net short position widened by $0.42 bn, reaching -$3.49bn.

The sentiment towards Japanese yen and Australian dollar improved in marked contrast to previous week. The Japanese yen net short position narrowed $1.18bn with net short bets in Japanese yen at -$4.95bn still the second highest among the major currencies. The decline in Australian dollar net shorts is the steepest. After narrowing by $3.67bn the net shorts in Australian dollar stand now at -$2.2bn compared to -$5.86bn the previous week. Sentiment towards Canadian dollar continued to improve with the net short bets narrowing $0.51bn to -$2.57bn.