August 1, 2016

IFC Markets, Forex Market Sentiment - US dollar net logs hit five month high

CFTC reported that US dollar bullish bets rose to $13.65 billion from $10.42 billion against the major currencies during the previous week.

Here is the “Long” and “Short” positions’ weekly changes and ratio.

This article is originally referred from IFC Markets Market Sentiment.

US dollar bullish bets rose to $13.65 billion from $10.42 billion against the major currencies during the previous week, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to July 26.

Investors increased dollar bullish bets to highest since February 2 ahead of Federal Reserve policy meeting as new data added to recent positive US statistics. Rising existing home sales and new home sales indicated housing market is still an important driver of US economic growth: existing home sales rose 1.1 percent in June and new home sales were up 3.5% after slumping 6% in May.

Investors built net logs on US dollar as positive economic data increase the likelihood of a rate hike by Federal Reserve later in the year. As is evident from the Sentiment table, sentiment deteriorated for all major currencies except for Canadian dollar. And Japanese yen, Australian dollar, Canadian dollar and Swiss franc remained the four major currency held net long against the US dollar.

The bearish euro sentiment continued to deteriorate despite the European Central Bank’s decision to hold off adding new monetary stimulus measures to support the euro-zone economy after Brexit. The net short position in euro widened at roughly the previous week’s pace rising by $1.7bn to $15.4 bn. The net short position in euro increased as investors reduced the gross longs by 2385 contracts and built the shorts by 10324 contracts respectively.

The British Pound sentiment also continued to deteriorate as data pointed to tangible negative impact of Brexit decision on UK economy: Services and Manufacturing PMIs indicate both sectors contracted in July.

The pace of increase in net short bets halved from previous week as the net short rose by $0.5bn to $6.6 billion. The net short position in British Pound widened as the gross longs were increased by 1860 contracts and the shorts rose by 8046. The bullish Japanese yen sentiment continued to weaken with the net long position in Japanese yen falling by $.0.46n to $4.17bn. Investors cut both the gross longs and the shorts by 5790 and 1395 contracts respectively.

The bullish sentiment held essentially unchanged for the Canadian dollar with the net longs rising by $63 million to just $1.75. billion. Investors increased the gross longs and covered the shorts. The bullish sentiment deteriorated slightly for the Australian dollar with net longs falling by $0.14 billion to $1.75bn.

Investors cut both the gross longs and gross shorts. The bullish Swiss franc sentiment deteriorated considerably with the net long position narrowing at almost double previous week’s pace, falling by $460 million to just $120 million. Investors increased both the gross longs and the shorts.

cftc sentiment vs exchange rate long short position

weekly change of net l s long short ratio

Original Source: IFC Markets Market Sentiment

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