By CountingPips.com
The latest Commitments of Traders (COT) report, released on Friday by the Chicago Mercantile Exchange, showed that futures speculators increased their euro short positions for a third straight week. Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by -25,569 contracts as of August 31st. This is an increase of almost 4,000 short contracts after speculators were net short the euro by 
-21,603 contracts on August 24th. Euro short positions have now declined for three straight weeks following a streak of six consecutive weeks of improvements.
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 betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar.
The euro, British pound sterling and the Canadian dollar were the major currencies on the short side against the dollar last week in the CME futures market while the Australian dollar, New Zealand dollar, Japanese yen, Swiss franc and Mexican peso all continued to have a net long amount of contracts. The Swiss franc was the only currency that saw net long positions increase as of August 31st and the Canadian dollar positions decreased to fall onto the short side.
The British pound sterling short positions increased to -15,266 as of August 31st after being short on August 24th by -4,365 positions. Pound sterling short positions have now increased for two straight weeks after showing improvement (declining shorts) for five straight weeks through August 10th.
The Canadian dollar positions fell for a third consecutive week and declined over to the short side for the first time in over a year to a net of -4,764 contracts after totaling 16,147 net longs last week.
The Japanese yen net long contracts edged lower last week to 49,904 from 51,069 net long contracts reported on August 24th. Yen positions have now continued to stay around the +50,000 level for the past five weeks after being short by -65,612 contracts on May 4th.
Swiss franc long positions increased for a third straight week to 14,281 long contracts as of August 31st after rising to 13,868 long contracts the week prior.
The Australian dollar futures positions declined to a net amount of 43,808 long contracts as of August 31st from 47,017 long contracts on August 24th. The Aussie long speculative positions have now fallen for two consecutive weeks following six straight weeks of increases through August 10th. New Zealand dollar futures positions fell lower for fourth straight week with 6, 957 long contracts after a total of 10,683 long contracts as of August 24th.
Mexican peso long contracts also dipped for a third week to 21,004 total long positions from 59,370 longs the week prior on August 24th.
COT Data Summary as of August 31st, 2010
Large Speculators Net Positions vs. the US Dollar
Euro: -25,569 short contracts from -21,603 shorts on August 24th
British pound sterling: -15,266 short contracts from -4,365 shorts
Australian dollar: 43,808 long contracts from 47,017 longs
Canadian dollar: -4,764 short contracts from 16,147 longs
Japanese yen: 49,904 long contracts from 51,069 longs
Mexican peso: 21,004 long contracts from 59,370 longs
New Zealand dollar: 6,957 long contracts from 10,683 longs
Swiss franc: 14,281 long contracts from 13,868 longs
