IFC Markets - Analytics

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    USD Net Longs Rise to Highest Level in Five Weeks

    The report of the Commodity Futures Trading Commission (CFTC) covering data up to July 14 showed the value of US dollar net long position increased to $27.28 billion from $25.75 billion in the previous week, hitting the highest level in past five weeks. The economic reports during the week like rising jobless claims indicated sluggish growth of US economy. At the same time Federal Reserve Chair Janet Yellen confirmed in her speech on July 10 in Cleveland that the Fed will hike the interest rates later this year as US economy recovers, inflation moves toward the longer-run objective of 2 percent and the labor market moves closer to maximum employment. The speech provided a lift to US dollar in addition to rising safe haven demand for the dollar as Greek debt crisis unfolded. As is evident from the Sentiment table, the sentiment deteriorated for all major currencies except for the Japanese yen. All currencies are still held net short, with the Swiss franc remaining the only major currency held net long against US dollar.

    The euro sentiment deteriorated again following the first improvement in a month the previous week. The net short bets in euro widened $1.18bn to $14.8bn, with euro comprising 54% of long US dollar position. The euro net short position rose as investors cut gross longs and increased gross shorts.

    The improvement in Japanese yen sentiment continued at the same pace with net short position narrowing $1.69bn to $4.8bn as investors covered shorts and increased gross longs. The Japanese yen still has the second highest short bets against US dollar, making about 17% of aggregate US dollar long position. The British pound net short bets widened $0.1bn to $2.3bn with investors cutting both gross longs and gross shorts.

    The sentiment toward the Canadian dollar deteriorated further with net short position widening $0.66bn to $3.2bn. Investors increased both gross longs and gross short positions. The Australian dollar net short bets widened by $0.8bn to $2.4bn as investors cut gross longs and increased gross shorts. The Swiss franc net longs decreased by $0.4 to $0.4bn as investors cut gross longs and increased gross shorts.

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