Data from the US Commodity Futures Trading Commission suggest that the market was short the rand between late February 2023 and mid-September. This shift coincided with South Africa’s greylisting by the Financial Action Task Force and a bout of rand weakness. The chart shows that there has historically been a positive correlation between net long speculative positions in futures and the rand. This is in line with what one observes for other major currencies, where speculative positioning tends 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.
