Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (93862)	8/25/2012 12:24:21 PM
From: Haim R. Branisteanu	Respond to of 217548

CFTC: Net Long Dollar Position Smallest in Nearly a Year By Stephen L. Bernard NEW YORK (Dow Jones)--Speculative traders are holding their smallest pro-dollar position in almost a year, government data showed Friday. Investors held a net long dollar position totaling $3.2 billion as of Aug. 21, down 58% from a week ago and 92% from a record high set in early June, according to the Commodity Futures Trading Commission's weekly report on the commitments of traders. Traders haven't held a net short dollar position since Sept. 6, 2011. The big shift in recent weeks is due largely to investors piling into bets in favor of so-called commodity currencies such as the Australian and Canadian dollars, which tend to rise and fall with the value of commodities and expectations for global growth. Paring of bets favoring the U.S. dollar against the euro have also diminished the overall appeal of the greenback. Net long Australian dollar trades, or bets the Australian dollar will rise against the U.S. dollar, totaled $9.1 billion, less than 5% shy of the record pro-Australian dollar bet set in April 2011. Traders held net long Canadian dollar positions totaling $5.1 billion, a nearly 80% jump from a week earlier. The increase in those positions means speculative investors are clearly expecting the Australian and Canadian dollars to continue to a nearly three-month rally against the U.S. dollar. Meanwhile, anti-euro bets continue to dwindle after hitting record levels in early June. Net euro short positions fell to $19.3 billion, a 9% decline from a week earlier. The CFTC report reflects trading through Tuesday, so it does not reflect additional selling pressure on the dollar late in the week. Traders continued to sell the dollar in recent days after the release on Wednesday of minutes from the Federal Reserve's last meeting, which indicated the central bank could be close to further easing measures. Total open interest--or contracts outstanding--climbed 6% from a week earlier and is up 33% in the past seven weeks as speculative investors continue to ratchet up positioning. According to traders and other market participants, the pickup in futures trading in recent months at a time when trading volume has been slow across financial markets is largely due to increased fears of counterparty risk. Buy-side firms such as asset managers and hedge funds are at the heart of the increased trading in the futures contracts, said Derek Sammann, senior managing director of interest-rate and foreign-exchange products for CME Group. "Counterparty risk fears are at an all-time high," Mr. Sammann said. Investors don't necessarily want to hold a three-month forward contract in the over-the-counter market that dominates foreign-exchange trading because of economic and financial-services risks, Mr. Sammann said. And unlike the spot market, futures traded on the Chicago Mercantile Exchange are cleared through a central exchange. The CFTC's weekly report tracks the movements of speculators on the CME. Although a small part of the global currency markets, these investors' positions are considered indicators of broader trading and sentiment.