CFTC report from May 17 covered information available on May 14

Last week, the most significant changes in the positioning on speculative transactions in the currency market were occured on the European currency and the Australian dollar. Judging by the Commodity Futures Trading Commission (CFTC) data, the volume of positions in both currencies has changed by more than 2 billion dollars in favor of short positions. Net short positions on the Swiss franc, the yen and the British pound also rose, and the Canadian dollar was the only currency of six majors, showing a reduction in the net short position. Since the position on the Australian dollar was negative there is no currency left with a net long position against the US dollar. The largest net short position is still observed on the Japanese yen, the euro has moved into second place, followed by the British pound and the Canadian dollar.

Net short position in the Canadian dollar fell by 0.8 billion USD, while the currency still keeps being the fourth currency holding the largest short position. The position volume is estimated at 4.4 billion USD. However, reducing the net short position may be temporary as the positioning was recorded before the release of Friday disappointing GDP data for Canada for the first quarter of the year.

The net position on the Australian dollar has turned negative for the first time since June of last year. Last week, its volume was -1.3 billion USD. We note that changes in the positioning occurred mainly due to the growth in the number of short positions, the number of long positions even increased slightly last week. Certainly, turning it into the net short position is a negative factor, but its one-sided nature can say about a possible movement limitation, taking into account that the AUDUSD currency pair approaches the key support at 0.97.

Last week, the euro showed the greatest absolute increase in net short positions. The position increased by USD 2.1 billion to -7.6 billion USD. The market sentiment remains bearish, as the single currency moved to the second place by largest short position among the six major currencies, being the second after the Japanese yen. Major changes in the positioning are associated with the increase in the number of short positions, but is has nothing to do with the reduction in long positions. In the short term, the downward movement may be limited, as the EURUSD is approaching the key support at 1.2750.

The net position on the British pound also rose, but not significantly, compared with the European currency. Last week, it was -6.2 billion USD. The expectations of market participants remain bearish and the pound is the third among the six major currencies having the largest net short position.

The net short position on the Swiss franc rose by USD 1.2 billion to 2 billion USD. The market sentiment is bearish, there have been no such negative expectations on the currency for more than 9 months.

The yen continues holding the leadership on the largest net short position against the US dollar. The short position increased last week by 0.9 billion USD, reaching 10.8 billion USD - the position consolidation is appeared around 10 billion. The sentiment remains bearish.