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Commitment Of Traders Report: Euro Bears Pile Back In, Kiwi Net Long At 4-Year High

June 25, 2017

New York (June 25)  The euro net long was drastically cut in the week to June 20th as the COT report showed an aggressive build in the gross short position. Speculators also showed increasing bullish sentiment towards antipodean currencies which recently shifted to a net long.

The Commodity Futures Trading Commission reported a weekly build in euro short contracts from 85,174 to 122,393 which reflects the largest gross short size since the middle of May. Combined with a small build in long contracts from 164,227 to 167,245 the net long euro position saw a significant drop to 44,852 contracts from last week’s 79,053.

  The most relevant risk event during this time was the Federal Reserve monetary policy meeting which revealed that the central bank is on course toontinue raising rates despite a decline in inflation in recent readings. In the past, the euro has been the preferred currency to short against the greenback during periods of dollar strength and as such, the positioning shift could be hinting of a broader turn in trend for the dollar.

The bearish bet on the loonie moderated further as non-commercials scaled back for a fourth consecutive week. The net short loonie position stands at 82,881 contracts, down from 99,109 contracts in late May. Canadian dollar bears have shown some resilience as the net short position remains above the prior record set in 2013 despite the recent hawkish shift from the Bank of Canada.

A build in both long and short contracts in Sterling resulted in a small weekly draw in the net short position. Long contracts rose to the largest size in six weeks while short contracts increased to a five-week high. The net short was reported at 37,604 contracts from 39,441 in the prior week.

This week marks one year since the EU referendum and the pound has been held net short the entire time. The current position size is well below the average seen during this time.

Similar to the British pound, speculators added to both long and short contracts in the Japanese yen leading to a small decline in the net short from 50,553 contracts to 49,959.

The Australian and New Zealand dollar both shifted to a net long this month. The latter shifted earlier this month while the former changed over to a net long in this week’s report after being held short by a marginal size in the two weeks prior. The Australian currency is held net long by 15,033 contracts from a net short of 1,511 contracts.

The Aussie net long remains below levels seen in early May but a build in the net long Kiwi position from 1,595 contracts to 21,455 contracts reflects the largest net long since May 2013. Kiwi bulls have been building a long position for five consecutive weeks and have gotten increasingly aggressive over the past two. Bears, on the other hand, appear to have thrown in the towel with a sharp drop in short contracts from 25,666 to 16,933 after having increased bearish bets in the two weeks prior.

Source: EconomicCalendar

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