US Commodity Futures Trading Commission data suggest that the futures market is holding large net speculative positions in the Mexican peso (long) and the Japanese Yen and Australian dollar (short). As discussed in an earlier post, speculative positioning has historically tended to move in the same direction as exchange rate changes over the same week. It is worth pointing out, however, that while futures positioning data can help with interpretation of historical exchange rate changes, their use as a predictor of exchange rates is limited.
