COT report (FX) review

CFTC commitment of traders report was released on Friday (11th July) and cover positions up to Tuesday (7^th July). COT report is not a complete presenter of entire market positions, since future market is relatively smaller compared to Spot FX market. Nevertheless, it presents crucial picture on how key participants are looking at future moves.

Key highlights -

Market participants are net short on all currencies except Franc against dollar.

Participants increased net long position in US dollar by $1.83 billion to $29.27 billion.

Shorts increased -

• Largest short addition was register in Mexican Peso by $1 billion to -$2.3 billion.
• Pound registered second largest short addition by $0.96 billion to -$2.2 billion.
• Commodity currencies saw moderate short addition. Canadian dollar saw short addition in tune of $0.66 billion to -$2.54 billion. Australian dollar shorts were increased by $0.73 billion to -$1.65 billion. New Zealand dollar shorts were increased by $0.13 billion to -$1.22 billion.

Shorts covered -

• Participants reduced short position in Euro by $0.27 billion to net -$13.66 billion.
• Japanese Yen registered largest short covering amid risk aversion. Shorts were covered by $1.55 billion to net -$6.5 billion.

Longs decreased -

• Swiss Franc longs were reduced by $0.11 billion to net $0.8 billion.