hedge funds

Hedge Funds Drastically Reduce Long Peso, Add Swiss Franc Positions: CFTC Data

Hedge funds covered their shorts in GBP this week ending June 18, reducing by 37 percent, and in CHF, reducing by 67 percent according to data just released by the CFTC. The data also show that longs in MXN futures were down by 44 percent while longs in EUR futures were increased.

Hedge Funds Drastically Reduce Long Peso, Add Swiss Franc Positions: CFTC Data

CFTC’s latest report shows that leveraged funds have been taking down their longs in the Mexican peso for the fourth straight week now.  Last week, these funds reduced long contracts in MXN from 59,441 positions to 32,927, a 44 percent reduction. In the meantime about 9,000 new short bets on peso futures and options were initiated.

GBP Shorts Pull Back

Investors have been expecting a dovish stance from the central bank of U.K. which recently welcomed its new governor, Mark Carney. Last week saw hedge funds paring their short bets on GBP which were reduced from 95,647 contracts to 59,971 such positions, a 37 percent cut. This is the second consecutive weekly pullback in short positions after investors took several weeks to place their bets against the currency.

Swiss and Japanese Currencies See Action

Trends in Swiss francs remains intriguing, where despite of some bearish opinions, hedge funds continue to favor longs compared to shorts.  Hedge funds slashed their shorts in CHF by 67 percent—a big cut—leaving only 7,256 short contracts in CHF futures and options. A roughly 50 percent increase in long contracts on CHF was witnessed in the week leading up to the Federal Reserve meeting, and total long bets are now 14,527 positions.

As for Japanese yen, a continuous decline in yen short futures has continued for several weeks now—this time 8,378 short contracts were covered while 69,345 are remaining.  Longs in JPY futures were also pulled back from 43,226 to 30,219 contracts. Meanwhile another 17,308 contracts were initiated in favor of euro futures, bringing the total to 77,518 positions. EUR has touched multi-month highs against the USD in the past week.

Follow Tabinda Hussain @tabihussain

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