Currency speculators raised their bets against the dollar in the latest week, according to Commodity Futures Trading Commission data released on Friday. The value of the dollar's net short position rose to $20.2 billion in the week ended October 6, from a $16.66 billion net short position the prior week.
The change in the net short dollar position was driven mainly by speculators' increased bets against sterling and an increase in long Canadian and euro positions. Net bets in favour of the Canadian dollar rose to 35,775 contracts from 18,209 contracts the prior week with open interest rising by 17,120 contracts to 88,135.
Rising open interest is sometimes viewed as a sign of increasing volatility. Net bets in favour of the euro rose to 51,045 contracts from 39,766 contracts in the prior week with a corresponding rise in open interest of 5,965 contracts to 170,878. But bets against sterling rose to 62,106 contracts from 47,826 contracts the prior week with open interest rising 13,258 contracts to 111,463. To be short a currency is to bet it will decrease in value, while being long a currency is a bet that will appreciate. The aggregate US dollar position is derived from the net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc, Canadian and Australian dollars.
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