Speculators Aggressively Dumping USD, Paring EUR Shorts

Speculative traders on the Chicago Mercantile Exchange seemed to lose most of the remaining attraction to the USD going into the year-end, data from the Commodity Futures Trading Commission (CFTC) showed on Friday.

Traders aggressively dumped USD by increasing their short USD bets from $818 million as of last week to $3.2 billion as of Tuesday.

In a parallel move, traders continued to cover their EUR bets slashing their short EUR position by 5% after cutting it by another 50% last week to reach a total of $5.0 billion as of Tuesday.

Looking ahead, "the USD is unlikely to make up much ground in the days ahead despite some likely positive data releases including yet more data showing housing market recovery and gradually improving confidence gauges, says Mitul Kotecha, head of global FX strategy at Crédit Agricole in Hong Kong.

CFTC's data also showed that traders increased their open short JPY position by 4% to reach a net of $14.4 billion. Traders also increased their open long AUD position by 13% from a week earlier to reach a net of $10.8 billion.

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