Currency traders continue to cut bets on US dollar strength

Currency traders are continuing to reduce their bets for further US Dollar strength.

A report from the ANZ bank analysing the latest commitment of traders report from the CFTC (Commodity Futures Trading Commission) in the US revealed the number of US Dollar “long” positions continued to fall last week.

The CFTC report shows the balance of speculative forex positions based off current market positioning. A net “long” figure suggests speculators expect a currency to rise while a net “short” position suggests the market, collectively, are looking for a currency to fall.

As the table from ANZ below shows, while most major pairs are still net short against the US Dollar, the number of shorts were reduced in all major pairs aside from the New Zealand Dollar last week.

Looking at cumulative US Dollar positioning based on speculative positions reported, it is clear that just like the currency, the number of US Dollar longs has been cut significantly in recent months. They now sit at levels last seen in mid-2014.

With the Fed remaining “data dependant” when it comes to the timing of its first rate increase, upcoming data releases in the US will likely determine whether this trend continues.

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