Currency speculators in the Chicago futures market were net buyers of dollars in the week to Tuesday for the first time in eight months, an analyst said on Friday. This is the first net long dollar position on the International Monetary Market futures since May 25 last year, said T.J. Marta, senior currency analyst at RBC Capital Markets in New York after the release of the Commodities Future Trading Commission data.
Traders' net long dollar position against six major currencies, excluding the Mexican peso, stood at 1,752 contracts, Marta said.
This flipping of positions coincides with the dollar's recovery this year which culminated in it hitting multi-month highs against several currencies this week.
At 1,752 contracts, IMM traders' net long dollar position is pretty small, but it may be significant.
During a rally in the dollar early last year, IMM traders built up a net long position of over 30,000 contracts in May, said Marta. With that in mind, there may be scope for further gains.
The data from the CFTC's Commitments of Traders report on speculative positioning are used by analysts as an indicator of future market direction.
Speculators generally are trend followers seeking to pick a precise top or bottom in the market.
Three specific currencies saw big changes in positions for the week.
Speculators went short the Canadian dollar to the tune of 7,365 net contracts, compared with net long positions of 1,269 contracts the week before. It was the first net short position since June, 2004.
Comments
Comments are closed.