Futures Traders Place Record Bets Canada Dollar to Decline
By Haris Anwar
Jan. 12 (Bloomberg) -- Futures traders boosted their bets against the Canadian dollar to a record high for the third straight week as a decline in crude oil prices and a slowing economy reduced the currency's appeal.
Wagers by hedge funds and other large speculators on a decline in the Canadian dollar exceeded bets on a gain by 84,906 as of Jan. 9, increasing from 74,268 a week earlier, according to the Washington-based Commodity Futures Trading Commission. It was the biggest so-called net short position since at least February 1983.
Canada's dollar rose 0.7 percent to 85.47 U.S. cents at 3:41 p.m. in Toronto. One U.S. dollar buys C$1.1694. Yesterday, it touched 84.72 U.S. cents, the weakest since Nov. 22, 2005.
Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange.
Canada's economy, the world's eighth-largest, failed to grow in back-to-back months in October and September for the first time since March and April of 2003, Statistics Canada reported Dec. 21.
Crude oil fell to a 19-month low yesterday, before rebounding today. Commodities such as crude oil account for about 54 percent of Canada's economy.
The Canadian dollar has dropped 6.4 percent from 91.44 U.S. cents on May 31, which was the highest since 1978.
Each Friday the Commodity Futures Trading Commission usually publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors that buy or sell futures to protect against price moves.
Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.
