Hedge funds and speculators on US futures markets have almost completely wound down their bets that the Brazilian real will rise in value, weekly data from the US Commodity Futures Trading Commission showed on Friday. It was the third biggest positional shift against the real this year, and coincided with the currency weakening beyond 4.00 per dollar for the first time since late May.
In the week to August 13, speculators and funds slashed their net long real position by 8,593 contracts to just 676 contracts from 9,269 the week before, CFTC data showed. That means funds are now broadly neutral on the real, having held their biggest net long position since February 2018 the week before. To be long an asset is to effectively bet that it will rise in value and to be short is to bet it will depreciate.
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