Foreign exchange speculators cut net long bets on the U.S. dollar to the lowest in seven months in the latest week, according to the Commodity Futures Trading Commission and one major house calcuation.
The dollar's net long position fell to $3.58 billion in the week ended September 24 from $10.8 billion the week ended September 17. It was the second week of declines after three weeks of gains in the net long dollar position.
The euro long position more than doubled to 65,844 contracts from 31,907 the week before, and is at the highest since April 2011. The net short position in the Australian dollar almost halved to 34,819 contracts from 60,032. The Net yen short position rose in the latest week to 92,818 contracts from 88,794.
So overall a move to dollar bearishness but not quite there yet. Given the rhetoric in Washington and the after shocks of the Fed decision it is perhaps unsurprising but could propel a dollar rise when the situation stabilizes and sentiment turns the other way.
The euro positioning could be read either that the single currency is due for continued gains or if viewed as a contrary bet, that the euro is going to struggle. Much may depend on washington and whether its risk on or off.
The build up in aussie short positions is ahead of the Reserve Bank of Australia meeting October 1. Give the RBA is likely more dovish than not, the shorts are probably correct.