Both bulls and bears added bets on US dollar ahead of the June FOMC meeting, as suggested in the CFTC Commitments of Traders report in the week ended June 12. Both speculative long and short positions were increased in USD Index (DXY) futures, resulting in Net LENGTH of 4 663 contracts up +249 contracts from the prior week. The index dropped -0.11% during the week as the greenback weakening against major currencies with the exception of Japanese yen and British pound.
For European currencies, NET LENGTH for EUR futures dropped further, by -1 011 contracts, to 88 225 for the week. Traders decreased bets on both sides but the decline in long positions was more than that for the shorts, as the market awaited ECB’s announcement on QE tapering. NET LENGTH for GBP futures increased +3 624 contracts to 10 969. While Brexit uncertainty remains, the lower house voted for the Government in rejecting a key amendment for future Brexit negotiations after PM Theresa promised to give the parliament “more say”. This is interpreted by the market as positive and might pave the way for a “soft” Brexit.
On safe-haven currencies. Net SHORT for CHF futures was down -1 971 contracts to 37 245. During the week, Swiss franc rose more than +0.3% against US dollar. JPY futures drifted to NET LENGTH of 5 052 contracts, from NET SHORT of 3 437 contracts in the prior week.
On commodity currencies, Net LENGTH for NZD futures rose +2 623 contracts to 7 006. NET SHORT for AUD futures dropped -4 973 contracts to 15 235 while that for CAD futures decreased -1 051 contracts to 14 988 for the week. All three currencies weakened against US dollar during the week.
