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The Crowded Long Dollar Trade Is No Longer Crowded

Published 09/04/2012, 04:06 AM

Remember the crowded trade in long USD positions (discussed here)? Well, it's not crowded any more as many of the longs have been blown out. The sentiment has quickly shifted (of you wonder why, just read this) and the short dollar bias is currently in place. The speculative futures players net exposure (from CFTC) shows them now to be net short the dollar.
US Dollar positioning
Reuters: Currency speculators turned negative on the U.S. dollar in the latest week for the first time in nearly a year, according to data from the Commodity Futures Trading Commission released on Friday. The value of the U.S. dollar's short position totaled $441.7 million from a net long position of position of $4.57 billion the previous week. It's the first net short position on the dollar since the week of September 6, 2011. To be short a currency is to bet it will fall in value, while being long is a view its value will rise.

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