By CountingPips.com
The latest Commitments of Traders (COT) data out on Friday showed that futures speculators continued to decrease their bets for the U.S. dollar against the euro for a fifth consecutive week as of August 3rd, according to the 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 -7,297 contracts after being net short the euro by -21,339 contracts the week before on July 27th.
Euro short positions have now declined for five straight weeks as sentiment has turned around quickly in the past few 
months with euro short positions having come off the all-time low level of -113,890 in May to being now at the best level since December 2009.
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 long position expect that currency to rise versus the dollar.
The British pound sterling was the only other major currency in addition to the euro that was net short in the CME futures market against the dollar as of August 3rd while the Australian dollar, New Zealand dollar, Japanese yen, Swiss franc, Canadian dollar and Mexican peso all had a net long amount of contracts against the dollar.
The British pound positions were just barely on the short side last week as net shorts decreased for a fourth straight week to just -250 short positions from a total of -17,940 that were reported net short on July 27th.
The Swiss franc positions turned to net long in the middle of June and continued higher to 16,223 long contracts after dipping to 6,216 long contracts the week prior. This currently marks the highest number of net long contracts for the Swiss franc since December 2009.
The Japanese yen net long contracts rose last week to 47,998 from 29,921 net long contracts on July 27th. Yen positions have risen substantially from May after being short by -65,612 contracts on May 4th.
The Australian dollar futures positions gained for fourth straight week and were net long by 48,715 contracts as of August 3rd following a net 40,533 long contracts on July 27th. The New Zealand dollar futures positions rose higher for a seventh straight week with 15,059 long contracts after a total of 13,674 long contracts as of July 27th.
The Canadian dollar long positions increased to a net 34,182 long contracts after 23,868 net longs the week before while Mexican peso long contracts advanced for a fourth straight week to 55,141 longs from 45,318 longs the week.
COT Data Summary (vs. the US Dollar) as of August 3rd, 2010
Euro: -7,297 shorts from – 21,339
British pound sterling: -250 shorts from -17,940
Australian dollar: 48,715 long contracts from 40,533
Canadian dollar: 34,182 long contracts from 23,868
Japanese yen: 47,998 long contracts from 29,921
Mexican peso: 55,141 long contracts from 45,318
New Zealand dollar: 15,059 long contracts from 13,674
Swiss franc: 16,223 long contracts from 6,216
