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 sixth consecutive week as of August 10th, 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 -3,731 contracts after being net short the euro by -7,297 
contracts the week before on August 3rd. This marks the best euro position in the futures market since the week of December 8, 2009 when positions were short by -511 contracts.
Euro futures positions have now improved for six straight weeks as investor sentiment has turned around quickly in the past few months. The euro improvement has coincided with a rise in the euro/dollar spot exchange rate that reached above 1.3000 before retreating some last week. Euro short positions have rebounded off the all-time low level of -113,890 in May and could be on the way to the long side for the first time since December 1, 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.
Despite the weekly improvement, the euro remained the only major currency on the short side against the dollar last week as the British pound sterling contracts in the CME futures market turned over to the long side against the dollar for the first time in a year. The Australian dollar, New Zealand dollar, Japanese yen, Swiss franc, Canadian dollar and Mexican peso all continued to have a net long amount of contracts against the dollar.
The British pound positions numbered 5,021 long positions as of August 10th after being on the short side on August 3rd with -250 short positions. This marks the fifth straight week of improvement in British pound sterling positions against the dollar.
Swiss franc long positions, which moved over to the long side against the dollar in the middle of June, dipped to 10,901 long contracts as of August 10th after increasing to 16,223 long contracts the week prior.
The Japanese yen net long contracts rose last week to 52,478 from 47,998 net long contracts on August 3rd. Yen positions have risen substantially from May after being short by -65,612 contracts on May 4th and have increased for two weeks a row.
The Australian dollar futures positions gained for fifth straight week and were net long by 54,370 contracts as of August 10th following a net 48,715 long contracts on August 3rd. The New Zealand dollar futures positions fell after advancing for seven straight weeks with 12,544 long contracts after a total of 15,059 long contracts as of August 3rd.
The Canadian dollar long positions increased to a net of 41,179 long contracts after 34,182 net longs the week before while Mexican peso long contracts advanced for a fifth straight week to 72,369 longs from 55,141 longs the week prior.
COT Data Summary (vs. the US Dollar) as of August 10th, 2010
Euro: -3,731 shorts from -7,297 shorts on August 3rd
British pound sterling: 5,021 long contracts from -250 shorts
Australian dollar: 54,370 long contracts from 48,715
Canadian dollar: 41,179 long contracts from 34,182
Japanese yen: 52,478 long contracts from 47,998
Mexican peso: 72,369 long contracts from 55,141
New Zealand dollar: 12,544 long contracts from 15,059
Swiss franc: 10,901 long contracts from 16,223
