Currency Traders Busy Buying Commodity Currencies

Commodity speculators increased their long position in the so-called commodity currencies - the Canadian, Australian and the New Zealand Dollar. Their total net long has grown to 84,185 contracts, the largest combined long position for over a year. The largest position is in the Australian where specs are now long 42.9K. The biggest change for the week was in the C$ where specs increased their long from 9.4K to 25.9K. To date purchases of the C$ has not worked out.

Specs continue to hold extremely large short positions in the euro and the yen. The flip side to the short euro and yen positions is a long USD for the most part. So what we really have for the first 84.1K of long commodity contracts might be considered long commodity currencies against which they are short the yen and the euro.

It is surprising the large spec longs in the yen, by an 8.6 ratio short are holding this position, considering the recent strength in the yen.

– US Dollar Index: There was a small reduction in the long positions held by the large traders. They are the biggest players in this market. This took the spec long DI position down to 24K, from 25.4 last period. The small spec remains a 3.9 ratio long.

– Euro (EUR/USD): The large OI in the euro got even larger going up 21K to 354K. Large specs increased both long and short positions. Both spec groups are abaout a 2 ratio short. The total spec short is up to 106.2K, a recent record. Market traded briefly under the 1.35 handle Friday but then bounced. The market seems to be too short for it to break.

– British Pound Sterling (GBP/USD): Large specs made small reductions in their long positions while the little specs keep buying the pound. The total long pound position held by the specs came down to 59.3K from 61.3K the previous week. There seems to be some profit taking after the long run up above the 1.70 area.

– Japanese Yen (JPY/USD): Large specs remain committed to the short side of the yen. They are now a 8.6 to 1 ratio short. Still, the total yen spec short was reduced to 83.4K from 89K last week. The OI was about unchanged and the total open is 175 far less than the euro or the pound.

– Swiss Franc (CHF/USD): The collective position of the small traders is bigger than that or the large traders. The total OI in the SF is quite small, only 37K. Not much happening here, as the peg to the euro continues.

– Canadian Dollar (CAD/USD): The large specs increased their long in the C$ while small specs reduced theirs. The total long in the C$ versus the USD is now up to almost 26, and the OI is up to 147K. Some fundamentals and market action may have turned against the loonie longs, but despite this they added to their longs.

– New Zealand Dollar (NZD/USD): The OI declined by about 9% and the small specs flipped to the short side of the kiwi. Participation by the small specs in the Kiwi is not very large. They account for less than 13% on either side of the market. Large specs are long 80.7% of the small market. There is less than 33K open. Market action since the end of the report has been cruel to NZ$ longs.

– Australian Dollar (AUD/USD): The total OI increased by 4K as the large specs were on the buy side. Large specs are now a 2.3 ratio long.There was also a good size increase in the spreading/option category. The total spec long position has grown to 42.9K, but the market action has been mostly sideways.

Currency Commitments of Traders with Delta-adjusted Options and Futures Combined, data through July 15, 2014.