Hedge Funds Slash Mexican Peso Longs, Cut Euro Shorts

Data from CFTC shows that investors took the week ending on June 4 to reduce their crowded bets in financial futures. One of the most significant reversals was seen in long exposures in the Mexican peso by hedge funds and CTAs, which are categorized as 'leveraged funds' by CFTC. Investors pulled long contracts in MXN futures and options from 113,830 positions to 80,873 contracts, roughly a 30 percent cut.

As we have noted before, MXN has been hurt the most by the USD's strength. The currency has plummeted from 12.11 against the USD to 12.85 in less than a month,...