Commitment Of Traders: Speculators Raise Bearish Bets On Pound

London (July 30)  Bearish dollar sentiment continued to dominate positioning in the currency markets. Last week, speculators added long to all the major futures currencies except the Japanese yen and Swiss franc. This week, the exceptions were the New Zealand dollar and the British pound.

The increase in bearish sentiment towards the British pound was significant. The position size had shrunk to 16,473 contracts in the last report which reflected the smallest net short in the time period following the EU referendum. The net short rose to 26,197 contracts attributed mostly to a build in gross short contracts. Despite the roughly 60% week over week increase in the net short, it remains well below levels seen in March and April.

 Non-commercials scaled back on the Japanese yen net short after adding to the position over the prior four consecutive weeks. The net short declined from 126,919 to 121,489 contracts with a draw in both gross long and gross short positions. The position size remains near a three and a half year high.

After shifting to a net long in the last report, speculators added to the loonie position. The net long rose from 8,043 contracts to 26,613 contracts. Similar to the prior week, the build was attributed to an increase in long positioning and a further cut of bearish bets. The largest loonie net long position held this year was 30,090 contracts at the end of February.

A rise in the Aussie net long shows it at a 15-month high. The net long rose from 51,356 to 56,374 contracts, marking a sixth consecutive week of improving sentiment. The Australian dollar’s antipodean counterpart, the New Zealand dollar, saw a small decline to end nine consecutive weeks of improving sentiment. The net long edged down from 35,981 contracts to 34,805.

The euro net long was little changed and remains near six-year highs. The position edged lower from 91,321 contracts to 90,842 contracts.

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