Currency speculators, collectively, have flipped to the long side of the U.S. dollar. This change from short to long is significant, since it is the first time specs have been long the USD since the COT report from July 6th, 2010. The total USD long was 17,646 contracts.
Specs were busy increasing their short positions in the euro to 79,610, the pound to 32,371, and increased their long position in the dollar Index to 16,781. Specs remained short the USD versus currencies from Australia, Japan, New Zealand, China and Switzerland.
The Swiss franc is not a big contract in terms of the open interest (OI) but the recent intervention by the Swiss National Bank makes examination of the COT report interesting. Specs had been large longs in the SF, and they remain long, unable to make a quick exit and avoid nasty losses from the intervention. Large specs remain a 2 to 1 long.
The total futures OI increased by 73,656 contracts, mostly in the euro, pound and the yen. Part of the OI surge is probably position squaring ahead of expiration of the September contract.
Often currencies are trending the market, when responding to the changing fundamental events. It will be interesting to see if the specs continue to buy the USD. They remain short the USD and are long the commodity currencies. Negative economic numbers also might cause specs to flee these market.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
