As suggested in the CFTC Commitments of Traders report in the week ended August 28, NET LENGTH of USD index added +449 contracts for 34 571 contracts for the week. Both speculative long and short positions dropped, suggesting the market was decisive about its outlook. during the reporting week, the DXY index slipped -0.57% while USD plunged -1.69% against the euro.
NET SHORT of EUR futures jumped +2 378 contracts to 7 219 contracts. The market remained concerned about the Eurozone’s inflation outlook as well as political uncertainty. Besides Turkish currency crisis which might affect some of Eurozone’s peripheral economies, concerns over Italy have rekindled. A media report suggested that Italian government might ask support from the ECB for debt financing. Meanwhile, NET SHORT for GBP futures deepened to 76 928 contracts, up +4 590 from the prior week. GBPUSD slipped -0.25% for the week as the outlook for sterling remains clouded by Brexit uncertainty.
On safe-haven currencies, Net SHORT for CHF futures dropped -2 474 contracts to 44 744 while that for JPY futures fell -1 365 contracts to 46 041 during the week. USDCHF declined -1.26% during the reporting week. The strength in Swiss franc was largely driven by Turkish currency crisis which has lifted demand for safe haven assets.
All commodity currencies stayed in NET SHORT positions. NET SHORT for AUD futures declined -5 574 contracts to 44 633, while that for NZD futures fell -1 216 contracts to 23 927. NET SHORT for CAD futures decreased -2 232 contracts to 24 789.