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Spec, CTA accounts piling up USD longs - TDS

FXStreet (Bali) - The FX Team at TDS reviews the latest changes on the CFTC commitments of traders report , for the week ending Tuesday, September 23rd, noting an increase in net USD longs to $35.2bn vs $30.5bn the week prior.

Key Quotes

"Changes in market positioning by speculative investors and CTA accounts aligned with the moves we have seen in spot rates, reflecting an increase in net USD longs to $35.2bn on the week ending on September 23rd from $30.5bn the week prior. This is the most bullish bet on the USD going back to 2007 except for a few weeks in July 2013 – pre Taper Tantrum – and May/June 2012 amidst market fears of a Eurozone breakup."

"The most notorious change was an extension of JPY net shorts from -83.2K to -105.4K, which drove the bearish market position on yen contracts back to the level prior to the FOMC meeting last week. In turn, net EUR shorts were also extended, but by a smaller amount, driving total net short to -142.0K from -137.1K prior. Given the marked decline in spot since Tuesday, we might well see net EUR shorts extended in next week’s data; recall they were at –161.4K at the beginning of September."

"In line with the move on EUR net short contracts, CHF registered a net short extension to -13.4K from -11.4K prior."

"The Dollar Bloc currencies saw a deterioration in speculative investors' sentiment towards AUD and CAD, whereas sentiment towards NZD was little changed. Net AUD longs were cut by 13.8K contracts to +8.3K, while net CAD longs were reduced to +3.1K from +7.5K the week prior. NZD net longs were increased by a minor amount to +1.8K from +1.1K prior. Positioning in MXN also showed a less constructive view on the outlook for the currency from specs, as net longs were scaled back to +10.5K, a bit less than half the size outstanding on September 16th."

"Finally, sterling registered a decline in net shorts to -1.0K from -6.6K."

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