Currency speculators added to their U.S. dollar longs, pushing their net long position up to 198,397 futures contracts. This is up from 110,851 contracts last week. The net increase in the open interest (OI) was only 20,495 contracts, caused in large part because the Canadian dollar longs were liquidating their massive long.
Their biggest short was in the euro, 107,928 contracts. In the pound, they were now short 83,326 contracts which of course put them long the USD. They are now also long 47,095 contracts of the DI futures. Their only significant short USD position was against the Japanese yen. There the large spec remain long 41.6K contracts.
It is significant when one of the three groups, large spec, small spec and commercials change their net position from long to short or vice verse. During this period, small specs in the yen and the SF changed positions, flipping to the short side. In the Australian dollar, the small specs also moved to the short side of the market, and in the Canadian dollar, commercials moved to the long side.
Currency markets often trend longer than expected, making it difficult to call a turn in market direction. However it has been unusual, recently, to see specs swarm to the long side of the USD so aggressively. Much of this movement is probably not love for the greenback, but fear of what is happening elsewhere. Perhaps this fear may have been intensified by house cleaning at the month and quarter's end. It will be interesting to see if the trend continues in October.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.