USD Net Longs Rise for Third Straight Week


According to the report of The Commodity Futures Trading Commission (CFTC) covering data up to June 9 the net long US dollar position rose to $34.68 billion from $34.15 billion in the previous week. Investors increased positive bets on the US dollar for a third straight week. As is evident from the Sentiment table, the sentiment deteriorated for all major currencies except for the euro and Swiss franc. The build in US dollar net longs continued after solid May jobs report confirmed previous indications of US economy recovery following unexpected slowdown in the first quarter. The modest increase in net long bets shows that markets had already priced in most of the upturn in US economy in the previous week after positive reports on housing market and manufacturing sector. At the same time the moderation of euro bearish sentiment indicates that investors are optimistic about the Greek bailout negotiations and discount the likelihood of Greek default. All currencies are held net short and only the Swiss franc is held net long against US dollar.

The euro sentiment improved considerably as net short bets in euro narrowed $3.6bn to $19.5.0bn, with euro comprising 56% of long US dollar position. The narrowing of euro net short position resulted mainly from short covering while investors increased also gross longs.

The deterioration in Japanese yen sentiment accelerated with net short position widening $3.0bn to $11.7bn as investors reduced gross longs and increased gross short positions for the fifth week in a row. The Japanese yen has now the second highest short bets against US dollar, comprising about 33% of aggregate US dollar long position. The British pound net short bets widened $0.26bn to $2.6bn.

The sentiment toward the Canadian dollar deteriorated for the second week with net short position widening $1.0bn to $1.1 bn. Investors increased considerably gross short positions and reduced gross longs. The Australian dollar net short bets didn’t change much as the net short bets increased by $49 million to $1.0 bn. The Swiss franc net longs increased by $0.24 to $1.3bn as investors increased gross longs and covered shorts.