By CountingPips.com
The latest COT data out on Friday showed that futures speculators slightly decreased their long bets for the U.S. dollar against the euro and British pound as of May 25th, according to the Commitments of Traders (COT) data released by the 
Chicago Mercantile Exchange.
Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by 106,736 contracts following net short bets of 107,143 contracts last week. The net short euro positions have now decreased for two straight weeks after being net short the euro by a record high of 113,890 contracts on May 11th.
The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are expecting that currency to fall against the dollar and net longs expect that currency to rise versus the dollar.
Other major currencies net short in the CME futures market against the dollar this week were the British pound, Japanese yen and Swiss franc while the Australian dollar, Canadian dollar, Mexican peso and New Zealand dollar all had a net long amount of contracts.
The British Pound Sterling net shorts edged lower to 75,079 contracts after a total of 76,745 net short contracts last week and reverses four straight weeks of increased shorts. The Swiss franc net short positions decreased to 12,619 contracts after 14,558 net shorts last week while the Japanese yen short positions dropped to 10,238 contracts as of May 25th after registering 34,289 net short contracts on May 18th.
The Australian dollar futures positions were net long by 19,523 contracts as of May 25th, a decrease in long positions after last week totaling net long 38,380 contracts. Long contracts for the Aussie have now fallen for six weeks in a row after reaching a high of 80,674 long contracts on April 13th.
Canadian dollar positions have also declined for a sixth straight week and were net long by 23,872 contracts after being 44,885 net long last week. The New Zealand dollar net longs fell to 7,662 this week after last week being net long by 12,553 contracts.
The Mexican peso long contracts fell for the week from 35,702 long contracts last week to 28,857 longs this week. This marked the sixth straight declining week in longs for the peso after registering a high of 112,226 long contracts on April 13th.
COT Data Summary (vs. the US Dollar) May 25, 2010:
Euro net shorts at -106,736 from -107,143 contracts on May 18th
British Pound net shorts decrease to -75,079 from -76,745 contracts on May 18th
Swiss Franc net shorts at -12,619 from -14,558 contracts on May 18th
Canadian Dollar net longs decrease to 23,872 from 44,885 contracts on May 18th
Australian Dollar net longs decrease to 19,523 from 38,380 contracts on May 18th
New Zealand Dollar net longs decrease to 7,662 from 12,553 contracts on May 18th
Mexican Peso net longs decrease to 28,857 from 35,702 contracts on May 18th
Japanese Yen net shorts decrease to -10,238 from -34,289 contracts on May 18th
