PFGBEST Currency Comment

CHICAGO - Feb 8/10 - SNS -- Following is the currency futures comment from PFGBEST Research.

IMM Currency Specs Added to Long USD Postions on Sovergn Debt Concerns

CFTC data released Friday February 5th showed currency speculators increased long positions on the US dollar from $3.11 Billion to $5.84 billion in the week ending February 2nd, according to Reuters News.

Significant changes in last Friday's report include a decrease in long positions and an increase in short positions in European currencies including the Euro, Swiss Franc and Pound Sterling, resulting in net short positions in all of those three currencies. Net long positions decreased significantly in the Canadian and Australian dollars over the prior week as traders exited risk trades.

The net short position in the Euro is the largest since its inception, according to Reuters News. European Union concerns are expected to continue to weigh on the Euro and benefit the US dollar and Japanese Yen. The EU needs to "Go beyond words to restore the confidence among investors worried about problems in Greece, Portugal and other weaker Euro zone states that threaten the global recovery." Growing Euro zone problems lower the global appetite for risk, and are resulting in the recent "Flight to quality" rallies in the US dollar and Japanese Yen. The latter is up 4% year to date in this move. Sovereign debt concerns also weigh on other risk trades including commodities including precious metals, energies and stock index futures.

The idea of a Greek bailout was quashed over the weekend at the G-7 meeting by Jean-Claude Juncker, Chairman of the Euro zone Finance Ministers Group. UBS analysts suggested an IMF rescue may be the best solution.

Former Federal Reserve Chairman Alan Greenspan said a US economic recovery is "going to be a slow, trudging thing," and that he "would get very concerned" if stock prices to continue to fall. He also suggested that unemployment likely will stay around 9 or 10% for most of this year, according to Bloomberg news.   The US has now lost a total of 8.4 million jobs since the recession began in 2007

For more information and specific trade recommendations, give us a call directly at 888.439.6033.

Commitments of Traders (COT) Data as of February 2nd.

(For each commodity, the COT reports provide information on the size and the direction of the positions taken, across all maturities, by three categories of futures traders)

　

JAPANESE YEN (Contracts of 12,500,000 yen)

2/02/10 week 1/26/10 week

Long 30,177 28,821

Short 23,042 33,168

Net 7,135 -4,347

EURO (Contracts of 125,000 euros)

2/02/10 week 1/26/10 week

Long 31,207 33,106

Short 74,948 72,645

Net -43,741 -39,539

POUND STERLING (Contracts of 62,500 pounds sterling)

2/02/10 week 1/26/10 week

Long 14,611 15,075

Short 48,579 42,228

Net -33,968 -27,153

SWISS FRANC (Contracts of 125,000 Swiss francs)

2/02/10 week 1/26/10 week

Long 10,344 12,421

Short 12,119 6,716

Net -1,775 5,705

CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)

2/02/10 week 1/26/10 week

Long 25,639 35,659

Short 10,284 9,850

Net 15,355 25,809

AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)

2/02/10 week 1/26/10 week

Long 46,531 61,097

Short 13,260 15,779

Net 33,271 45,318

PFGBEST Research Team

Phone: 800-361-6855 or 319-553-2181

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