USD Net Long Rises while EUR, JPY Net Shorts fall


According to the report of The Commodity Futures Trading Commission (CFTC) covering data up to July 7 the value of US dollar net long position increased to $25.75 billion from $25.11 billion in the previous week. The modest increase in bullish bets on US dollars is consistent with June jobs report, which showed unemployment fell but nonfarm payrolls rose at a slower pace. As is evident from the Sentiment table, the sentiment deteriorated for all major currencies except for the Euro and Japanese yen. All currencies are still held net short and only the Swiss franc is held net long against US dollar.

The euro sentiment improved slightly following four straight weeks of rising net short bets. The improvement in euro sentiment is noteworthy in light of breakdown of Greek bailout negotiations and July 5 referendum in Greece where 61 percent of voters rejected the austerity measures that creditors demanded for bailout extension. Investors clearly expect a positive resolution of Greek debt crisis and discount any possibility of Greek exit from euro-zone. The net short bets in euro narrowed $0.28bn to $13.6bn, with euro comprising 53% of long US dollar position. The euro net short position rose as investors covered shorts and increased gross longs.

The improvement in Japanese yen sentiment continued at higher pace with net short position narrowing $1.5bn to $6.4bn as investors covered shorts and increased gross longs. The Japanese yen still has the second highest short bets against US dollar, comprising about 25% of aggregate US dollar long position. The British Pound net short bets widened $0.9bn to $2.2bn with investors cutting both gross longs and gross shorts.

The sentiment toward the Canadian dollar deteriorated further with net short position widening $0.6bn to $2.5 bn. Investors cut gross longs as they increased gross short positions. The Australian dollar net short bets widened by $0.7bn to $1.6bn as investors built both gross longs and gross shorts. The Swiss franc net longs decreased by $0.1bn to $0.8bn as investors cut gross longs and increased gross shorts.