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  1. #1
    cashbackforex is offline Junior Member
    Join Date
    Apr 2012
    Cork, Ireland

    Default Speculators Continue to Cover Short USD Positions

    CFTC Commitments of Traders Report, 06 November 2012. Speculators continue to cover their short USD positions, taking the net position down to only 42,006 contracts from last week's total of 75,689 contracts. When dissecting the aggregate net position, there are some interesting trends.

    [What is the CFTC Commitments of Traders Report?]

    The short euro and yen positions versus the USD continue to grow. Euro shorts are back up to 91.5K and the yen short position is up to 84.9K. Both the DI and the SF flipped to the long side of the USD.

    The commodity currencies - the Canadian, New Zealand, and Australian Dollar - are all very popular with the specs. The total long in these three currencies is 189.8 contracts. This is up from 183.3K in the previous week, but is little changed during the past three weeks. In the COT report from October 9, 2012, the commodity currency long was 185K.

    US Dollar Index: The OI did go down more than 10% in this small market, but the big change in the DI was that all major participants flipped their positions. The large specs, the biggest players in this market, moved to the long side of the DI, and the small specs and the commercials both established very nominal shorts.

    Euro (EUR/USD): The speculative short in the euro has grown in the past few weeks. Large specs are now a 2.6ratio short. The small spec increased his net short by selling out long positions. Spreading, mostly the option trade, again increased and is now 10.8% of the total OI.

    British Pound Sterling (GBP/USD): Both size specs remained long the pound, but they both reduced the size of their modestly; together, they remain long 33.3K contracts. Market actions have favored the shorts since the end of the period. The total OI, 176K is large for the pound.

    Japanese Yen (JPY/USD): The speculative short in the yen continues to build. The total spec short is now up to almost 85K. Large specs are a 2.5 ratio short and the small specs are a 4.4 to 1 ratio short. Recent price action since the end of the report has not favored the short position. Spreading is up to 6.2% of the OI.

    Swiss Franc (CHF/USD): All three groups flipped their positions during the period. The large specs are now short, but by only 0.3K but the small specs were more aggressive, and are now 3.4K short. The peg to the weak euro seems to be the cause of the selling in the Swissie.

    Canadian Dollar (CAD/USD): There was some spec liquidation in the C$, but the long remains a hefty 82.8K. The large spec remains a 12.5 ratio long, while the little spec is less than a 2 to 1 long. The market has been putting mild pressure on the longs.

    New Zealand Dollar (NZD/USD): The OI increased by over 10% in this small market and it is now almost as big as the DI contract. The increase is the result of spec buying, with the large specs increasing their net long to 19.4K; this gives them a 4.8 ratio long. Small specs are a little less than a 3 long.

    Australian Dollar (AUD/USD): Both spec groups added to their longs, increasing their net positions by over 14K contracts. Large specs are now a 2.5 ratio long. The market action since the end of the period has favored additional buying. The total OI in the A$ is now above 191K.

    Any opinions, news, research, analyses, prices, or other information contained in this post are provided as general market commentary, and do not constitute investment advice from and/or

  2. #2
    babynancy543 is offline Junior Member
    Join Date
    Dec 2012


    Think of it this way. You're not buying or selling anything. The dealer is. The dealer sells EUR64,900 from his bank euro account and gets USD100,000 which he holds in his bank dollar account and doesn't put in your account. He is doing this on your behalf, so you are responsible for and losses and get and profits. The money in your account stays put and is the insurance for the dealer that you can cover the losses.

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