Speculators bought back previously sold Canadian dollar and Mexican peso futures positions in dramatic fashion in the CFTC reporting week ending June 27.  

Yet, in some ways, what is striking may not be the covering of 33.2k Canadian dollar future contracts, as large as that may be, but rather that the speculative gross short position stood at a still substantial 78.2k contracts. The Canadian dollar appreciated nearly another 1.8% in the three sessions since the reporting period ended.  

This suggests there is scope for more short-covering gains. In this vein, it is also interesting to note that the speculative longs barely changed. Given the dramatic move in spot, speculators were ill-prepared

Speculators covered around 40% of its gross short Mexican peso position, buying back 31.7k contracts. The gross short position stands at 45k contracts. Like in the Canadian dollar, speculators hardly added to their gross long position. They added less than 500 contracts, but their gross long position of 126k contracts is nearly five times larger than the gross long Canadian dollar position (28.7k contracts). Speculators are net long 81k peso futures contracts, but still net short 49.5k Canadian dollar futures contracts.  

Speculators also added 12.4k contracts to the gross long euro position, raising it to 179.7k contracts. The shorts barely covered. The 1.4k contracts reduction in the gross short position, leaves a substantial 121k contracts. The net long position of 58.7k contracts compares with 64.8k at the end of May.  

The other significant speculative position adjustment, which we define as 10k of more contracts, was with the Japanese yen. The bears added 10.1k to the gross short position, which stood at 99.6k contracts at the end of the reporting period. The bulls liquidated 1.2k contracts to trim the gross long position to 38.3k contracts. The net short position increased to 61.4k contracts from 50k previously. At the end May, the gross short position was near 52k contracts.