Rates as of 0500 GMT
The rates scream holiday market. With the UK and US on holiday today, it appears that traders decided to knock off early on Friday and havent come back yet. Its hard for me to get excited explaining discussing movements of 0.2 or less. Furthermore, looking at the screens I can find no good explanation of the small movements that did take place, except for such generic comments as endmonth portfolio rebalancing and ahead of Tuesdays Reserve Bank of Australia meeting, etc.
Commitments of Traders CoT report
Once again the dominant trade was selling dollars, mostly against EUR, GBP, and CHF. This is the sixth consecutive week that specs have increased their net short USD position. The selling was not very aggressive however. The increase in EUR positions was small despite EURUSD returning back above the 1.22 level.
The CHF trade was notable in that it represented a large portion of the relatively small CHF position. Specs went from short 4,265 contracts to short 1,203 contracts. Traders have generally been long CHF over the last two years and have been short only since late April.
On the other hand, specs flipped from being slightly long AUD to slightly short. There was little change in the other two commodity currencies.
Hedge funds also cut their AUD positions and increased their GBP longs, as well as increasing their CAD and NZD longs too. They too flipped from short CHF to long. However their JPY positions were virtually…