CFTC report from June 21 covered information available on June 18

According to the CFTC, the last week there have been filled with significant changes in the positioning on the major currencies. The euro and the Swiss franc were moved into the category of currencies, holding a net long position against the US dollar, these two currencies having the greatest change positioning registered. In addition, the net short positions in the rest of the major currencies except the Australian dollar were significantly reduced. The largest net short position is still observed on the Japanese yen and the Australian dollar.

Despite the significant changes in the positioning not in the US dollar favor, the recent Commission report does not have the key events of the last week (the Fed meeting and a press conference by Ben Bernanke) taken into account, caused the significant change in the markets, that has led to the US dollar wide strengthening. In this regard, we consider net short positions at this time undervalued, and long positions – overvalued.

The net short position on the Canadian dollar fell by 1 billion USD down to -2.6 billion USD. The sentiment remains bearish, and the Canadian dollar is the third currency having the largest net short position among the major.

The Australian dollar was the only currency again holding the net short position which has grown during the last week, reflecting a more negative sentiment. Last week, the position value was -6 billion USD, while it recorded the thirteenth consecutive negative change in positioning. The Australian dollar is the second currency having largest net short position following only the Japanese yen.

The net position on the European currency has been significantly increased for the third time in a row (+4.6 billion USD), so that net short position was completely eliminated. The net long position on the euro was 3.4 billion.

The net short position on the British pound fell by 3.2 billion USD down to -2 billion USD. The bearish sentiment is dominating, but the reduction rate for the net short position raises concerns.

The net short position on the Swiss franc was completely eliminated after the euro. The net long position was 0.8 billion USD.

Yen holds the leadership by the largest net short position against the US dollar, despite its last week decline by 1.4 billion USD to -8.1 billion USD. The sentiment remains bearish.