1.  There were two significant (10k contracts or more) gross currency adjustments among the speculators in the CFTC reporting week ending October 20. The gross short euro position was reduced by 12.9k contracts to 138.9K. The gross long yen position rose by 10.7k contracts to 48.7k.  

2.  There was a clear overall pattern among speculators. The gross long currency positions were extended among all eight of the currencies we track.   The gross short positions were largely trimmed. There were two exceptions. There was a 600k contract increase in gross short yen positions (to 52.4k contracts) and a 5.7k contract increase (to 81.7k contracts) in gross short Australian dollar futures.

3.  The large speculative short position in the currency futures that was cited earlier this year as a factor restraining the bear market has been greatly reduced. The net short euro position of  62.6k contracts is the smallest since July 2014. The net short yen position of 3.6k contracts is the smallest since October 2012. The speculative market is net long 7.5k sterling contracts, the most since September 2014. The speculative market is also net long Swiss franc futures (600 contracts), and New Zealand dollar futures (3.8k contracts).

4.  The bulls increased their gross long euro exposure by 25% since the end of September to 76.3k contracts. The gross short position of 138.9k contracts is half of the late-March peak and the smallest since July 2014.

5.  The 48.7k gross long yen futures contracts by speculators matches the six month average. The gross short position is 52.4k contracts, which is nearly a third of the size that prevailed in the middle of August.  

6.  Regarding the recent positioning as a capitulation of the dollar, bulls may be a bit strong of an assessment. However, the net position of three of the eight net speculative currency futures positions we track are long, the most in over a year. The dollar’s rally at the end of last week felt like the market was caught leaning the wrong way, and many chased the market to re-establish long dollar positions.