Both bulls and bears trimmed bets on US dollar after its rally to the highest level in over 6 months, as suggested in the CFTC Commitments of Traders report in the week ended June 5. Both speculative long and short positions were reduced but the latter overwhelmed, resulting in an increase (+490 contracts) in Net LENGTH for USD Index (DXY) futures to 4 414 contracts. The index dropped -0.98% during the week, weakening against major currencies with the exception of Japanese yen.
NET LENGTH for EUR futures fell -3 801 contracts to 89 236 for the week, while that for GBP futures dropped -2 162 contracts to 7 345. Traders increased bets on both sides, but shorts were more than longs. This was driven by concerns about political deadlock in Italy and its impact of ECB’s monetary decision for the former, and ongoing Brexit uncertainty for the latter.
Net SHORT positions were trimmed in both safe-haven currencies. Net SHORT for JPY futures slipped -4 599 contracts to 3 437 while that for CHF futures was down -4 215 contracts to 39 216.
On commodity currencies, Net LENGTH for NZD futures rose +2 982 contracts to 4 383. Kiwi was the best performer against the greenback among major currencies, gaining +1.32%. NET SHORT for AUD futures dropped -3 027 contracts to 20 208 while that for CAD futures climbed +349 contracts to 16 039 for the week. All three currencies appreciated against US dollar during the week. The rise in Net SHORT for CAD futures was likely driven by intensifying concerns about the trade policy outlook as the White House displayed a tougher stance.