NEW YORK (Dow Jones)--Traders were more pessimistic about the beleaguered euro last week, holding a net $13.4 million in wagers that the currency, plagued by the region''s fiscal crisis, will weaken, data from Commodity Futures Trading Commission''s weekly report on the commitments of traders showed Friday.
Speculators held a net 77,720 short contracts on the euro as of Oct. 18. Those positions were part of the reason why speculative bets that the dollar will strengthen went up 4% this week, to $14.2 billion.
"It''s pretty clear sentiment remains pretty bearish," said currency analyst Anish Abuwala of Nomura Securities in New York. "Most of the outlook is going to be determined by policy so it''s not entirely surprising that shifts haven''t been very big."
Bowing to the wishes of the Swiss National Bank, which has pledged to defend aggressively the Swiss franc''s exchange rate against the euro to keep it from becoming too strong, traders shifted their view on the franc this week from positive to negative. They held a net $312 million in bets the franc will decline, or 2,243 contracts.
Traders continued to expect the yen will keep its upward trajectory against the dollar, holding $4.4 billion in net long bets, or 26,907 contracts. But that position was 23% smaller this week, indicating that speculators are less certain that the currency will appreciate.
The British pound had a net $5.2 billion short position, down 24% from the previous week.
Speculators were also considerably more interested in the Australian dollar this week, holding optimistic bets on the currency worth net $2.1 billion, up 94% from the previous week. Traders held 22% more long bets in the New Zealand dollar, for a net $654 million. The Canadian dollar''s position was virtually flat, with a net $2.4 billion in pessimistic bets.
The CFTC''s weekly data report shows speculative investors'' positions in major currencies held against the dollar. It viewed the markets through Tuesday.
While the market is waiting for the outcome of the next European leaders'' summit on Wednesday, few have much hope that the meeting will solve the region''s debt crisis, Abuwala said. "Every single time markets focus in on one of these big summits, it gets delayed, or they announcea plan to make a plan," he said.