Fri Jun 29, 2012 4:40pm EDT
NEW YORK, June 29 (Reuters) - Currency speculators increased their bets in favor of the U.S. dollar in the latest week, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position rose to $26.73 billion in the week ended June 26, from $22.13 billion the previous week. The Reuters calculation for the aggregate U.S. dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc, Canadian and Australian dollars. Short euro bets, meanwhile, rose to 159,880 contracts from net shorts of 141,066 a week earlier as euro zone risks escalated in the run up to the European Union summit which concluded on Friday. To be short a currency is to bet it will decline in value, while being long is a view its value will rise. Prior to Friday's gains, the euro was on a downward trajectory as investors were skeptical that European leaders would come up with a viable solution to address the worsening debt crisis in the region. The EU did come up with a proposal, but analysts remained leery of the deal and many viewed it as a short-term solution to an endemic problem. Euro short positions could probably decrease next week given the unexpected EU outcome, but bets against the single euro zone currency will remain for some time. Other notable changes in this week's CFTC report was the sharp reduction in the yen long position to 4,542 contracts. Japan's Prime Minister Yoshihiko Noda faces the risk of a split in his party that could trigger a snap election after his signature tax increase plan cleared parliament's lower house on Tuesday despite its rejection by a group of party rebels. The tax hike is aimed at curbing Japan's growing public debt, which already exceeds two years' worth of its economic output. Analysts at Morgan Stanley say the move to raise taxes will give the Bank of Japan more leeway to ease monetary policy and that is likely to be negative for the yen. Speculators also reduced their short position on sterling to 758 contracts this week from 17,153 shorts previously even though analysts are widely expecting another round of quantitative easing in the UK. Sterling like the dollar has been benefiting from safe-haven flowsas euro zone risks deteriorated. JAPANESE YEN (Contracts of 12,500,000 yen) -714,330,649.22 6/26/12 week 6/19/12 week Long 43,910 44,740 Short 39,368 29,603 Net 4,542 15,137 EURO (Contracts of 125,000 euros) 24,959,266,500.00 6/26/12 week 6/19/12 week Long 36,933 54,449 Short 196,813 195,515 Net -159,880 -141,066 POUND STERLING (Contracts of 62,500 pounds sterling) 74,080,287.50 6/26/12 week 6/19/12 week Long 35,296 32,248 Short 36,054 49,401 Net -758 -17,153 SWISS FRANC (Contracts of 125,000 Swiss francs) 3,099,126,274.18 6/26/12 week 6/19/12 week Long 4,637 24,108 Short 28,473 31,115 Net -23,836 -7,007 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) -905,868,567.52 6/26/12 week 6/19/12 week Long 27,778 27,808 Short 18,501 19,607 Net 9,277 8,201 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) 217,195,400.00 6/26/12 week 6/19/12 week Long 40,023 41,121 Short 42,182 44,579 Net -2,159 -3,458 MEXICAN PESO (Contracts of 500,000 pesos) 277,991,856.91 6/26/12 week 6/19/12 week Long 32,190 22,801 Short 39,837 37,475 Net -7,647 -14,674 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) -45,509,760.00 6/26/12 week 6/19/12 week Long 6,108 3,564 Short 5,532 5,777 Net 576 -2,213
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