Currency speculators increased bets in favour of the US dollar in the latest week, according to data from the Commodity Futures Trading Commission released on Friday and Reuters calculations. The value of the dollar's net long position rose to $9.87 billion in the week ended November 1. Net long dollar positions stood at $8.92 billion a week earlier.
Speculators more than halved bets in favour of the Japanese yen, to 25,409 contracts in the latest week from 54,279 the prior week, which was the highest since the beginning of August. The shift came after Japanese authorities this week intervened unilaterally to weaken the yen. The dollar hit an all-time low of 75.311 yen on electronic trading platform EBS before the intervention.
To be short a currency is to bet it will decline in value, while being long is a view its value will rise. The decline in non-commercial net long yen positions reflects a decrease of 32,328 long positions to 43,671 contracts, and a fall of 3,953 short positions to 17,767 contracts.
A trader is classified as "non-commercial" if the trader is not using futures contracts in a particular currency for hedging purposes. Non-commercial speculators take the risks. Yen open interest fell 27,517 contracts to 138,045 contracts. Long yen contracts were 31.6 percent of open interest while short positions represented 12.9 percent of open interest.
Open interest is taken as a sign of the strength in a given price movement, though not an indication of direction. Increasing open interest is said by analysts to illustrate strength behind the price movement, while a drop shows weakening price movement. A rise in open interest also indicates that the security is being actively traded, while a decline would show less activity.
The decline in non-commercial net short positions reflects an increase of 4,988 long positions to 26,311 contracts, and a fall of 11,464 short positions to 86,371 contracts. Euro open interest fell 4,545 contracts to 231,229 contracts. Long euro contracts were 11.4 percent of open interest while short positions represented 37.4 percent of open interest.
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