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Forex Flash: USD longs doubled; CAD at risk of squeeze - TDS

CFTC data showed speculative currency accounts moving into further USD buying in the week through Tuesday, March 5th, the TDS team notes on their CFTC summary report.

"The shift toward the USD has been a steady trend since the beginning of February and the implied USD net long more than doubled this week to USD 18.3 bn (from USD 8.6 bn)" TDS comments.

TDS adds: "A sharp boosting of EUR net shorts was the largest positioning shift by value. Net short contracts nearly tripled to 26.1k (from 9.4k last week) on dovish expectations of ECB." TDS suggests that post Draghi, EUR shorts likely to be trimmed.

However, the most remarkable takeaway from the CFTC, as TDS notes, was "the huge extension of the net short CAD position, the second largest change by value, but perhaps the most notable story" they say, adding that "net short CAD more than doubled to 46.7k (from 21.4k), that’s the largest net short since Q1 2007, and such an extreme is at considerable risk of a squeeze."

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