Currency speculators in the Chicago futures market extended their net long position in Australian dollars in the week ended February 1, data from the Commodity Futures Trading Commission showed on Friday. According to the International Monetary Market futures data from the CFTC, currency speculators' net long Australian dollars position was 35,784 contracts, compared with the previous week's net long position of 30,903 contracts.
"According to our calculations, it does appear to be a record net long Australian dollar position held by speculators," said Sean Callow, currency strategist with IDEAglobal in New York.
The data from the CFTC's Commitments of Traders report on speculative positioning are used by analysts as an indicator of future market direction.
For example, extreme net long speculative positions often signal a decline in the currency going forward, especially if that position conflicts with the positioning of the more influential commercial players.
The big net long position in Australian dollars could also indicate that the currency is overextended and may be vulnerable to a sell-off, Callow said.
A number of currency investors he had spoken to during the last week "said the Australian dollar was among those most prone to pullbacks," he added.
Long positions are effectively bets a particular asset will strengthen, while short positions are effectively bets it will weaken.
Speculators generally are trend followers seeking to pick a precise top or bottom in the market.