USD Nel Longs Rise as EUR, CHF Bearish Sentiments Build

According to the Commodity Futures Trading Commission (CFTC) report covering data up to March 24 the US dollar net long positions rose to $43.87 billion from $38.58 billion the previous week against the major currencies. As is evident from the CFTC Sentiment table, the increase in the value of aggregate long US dollar position was mainly the result of increase in net short euro position. The building of net short euro positions reflects investors’ increased bearish sentiment toward euro as they discounted the information on Fed’s plans to tighten monetary policy on the backdrop of European Central Bank’s ongoing 60 billion euro monthly monetary stimulus program. Another notable change is the deterioration in Swiss franc sentiment after improvement last week that made the Swiss franc the only currency held net long against the US dollar. After $0.79bn widening of Swiss franc net short position, the second in magnitude increase in net short position during the week among major currencies, the Swiss franc is now held net short against the US dollar as is every other currency.

Euro bearish sentiment continued to build at a faster pace for the third week as euro net short positions increased by $4.5bn to -$30.2bn. Euro still makes the bulk of net short positions against US dollar. The British Pound net short position widened by $0.09bn, reaching -$3.58 bn.

The improvement in sentiment towards Japanese yen continued at a slower pace. The Japanese yen net short position narrowed $0.16bn compared to $1.18bn fall in net short bets the previous week. The Japanese yen net short bets at -$4.79bn are still the second highest among the major currencies.

The sentiment shifted to bearish for Australian dollar and Canadian dollar, which extended their net short positions by $40mn and $47mn to -$2.24bn and -$2.61bn respectively.