Speculators Ease Up on Aussie Dollar Shorts — Is a Breakout Brewing for the AUD?
CFTC data reveals shift in sentiment ahead of key RBA decision
Australia’s currency is garnering attention this week after the Commodity Futures Trading Commission (CFTC) reported that speculative net short positions in AUD futures have narrowed significantly. According to the latest Commitments of Traders report for the week ending July 8, 2025, non-commercial traders—those trading AUD futures purely for speculative purposes—have cut their net position from –72.6K to –70.1K contracts, indicating a mild shift toward a less bearish outlook.
This change may seem minor at first glance, but it signals growing interest from speculative accounts as market sentiment becomes less pessimistic about the future performance of the AUD. Traders are adjusting ahead of fresh catalysts such as upcoming Reserve Bank of Australia (RBA) announcements and critical economic data.
Seeing narrower net shorts suggests fewer bets on a weakening Australian dollar. It’s not a full reversal—shorts still outweigh longs—but it does signal caution. As domestic growth shows signs of stalling and global commodity prices adjust, this tempered bearishness hints at potential market stabilization or even tentative bullishness.
FX desks have noted that smaller positioning often precedes a breakout in AUD/USD, especially during key policy meetings. With the RBA expected to hold fire or signal further tightening in forthcoming minutes, the AUD may tighten its trading range between US$0.64–0.66.
Alongside central bank signals, traders are watching commodity trends. Australia’s exports—iron ore, coal, and LNG—remain under pressure due to softer Chinese demand. That said, the rally in net longs from speculators shows that confidence hasn’t evaporated just yet.
In the broader forex landscape, the Australian dollar has been tied to global risk sentiment. A flatter short position increases the chances of AUD participation in risk-on rallies if trade tensions ease or global growth surprises positively.
For forex traders, this is a compelling setup. The narrowing of shorts suggests fewer sellers in the market, which often precedes a move higher, especially if new economic data surprises to the upside. With RBA commentary due soon and U.S. inflation data next week, currency players are on alert.
Overall, the modest adjustment in net speculative positions indicates that the relationship between AUD futures and market sentiment is shifting. Traders are toning down bearish positions and preparing for potential AUD strength—either through domestic signals or global momentum.