US dollar net long position fell from $20.95 billion in the previous week to $20.48 billion according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to September 22. Net long bets on US dollar fell for the second week to hit the lowest level since late July 2014. Investors reduced their positions in International Money Market following the Federal Reserve’s decision on September 17 to keep the interest rates unchanged. As is evident from the Sentiment table, the sentiment improved for all major currencies except for the Australian dollar and euro. All major currencies are still held net short against the dollar except for the British Pound which built a modest net long position of $122 million.
The euro sentiment improved as the net short bets in euro narrowed $0.59bn to $11.2bn, with euro’s share declining slightly to 54% of long US dollar position. The euro net short position fell as investors covered shorts .The Japanese yen sentiment also improved with net short position narrowing $0.3bn to $2.46bn as investors sought the safety of yen with increased risk aversion in the wake of Fed’s decision. Investors increased both the gross longs and gross shorts. As the sentiment continued to improve for the British Pound investors reversed the positioning in Pound from net short to modest net long of $122 million as they increased bullish bets by $0.46bn. The reversal in Pound positioning was affected as investors increased gross longs and covered shorts.
The Canadian dollar sentiment improved for the fifth consecutive week with the net short position narrowing $0.66bn to $2.8bn. Investors reduced gross longs as they covered shorts. The Australian dollar sentiment deteriorated with net short bets widening by $0.8bn to $3.7bn as investors cut both gross longs and gross shorts. Swiss franc sentiment deteriorated with the net short position narrowing $0.72bn as investor reversed positioning from net long to a net short of $0.24bn. Investors cut the gross long contracts as they increased gross shorts.