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US Dollar net speculator positions fell to $-1.91 billion last week

The latest data for the weekly Commitment of Traders (COT) report, released by the Commodity Futures Trading Commission (CFTC) on Friday, showed that large traders and currency speculators reduced their bets for the US dollar for a fourth straight week and into an overall short position for the first time in approximately fourteen months.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar long position totaling $-1.91 billion as of Tuesday July 18th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly decline of $-1.9725 billion from the $62 million total long position that was registered the previous week, according to the Reuters calculation (totals of the US dollar contracts against the combined contracts of the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc).

The US dollar aggregate position was last in short (bearish) territory on May 17th 2016 when positions totaled $-4.19 billion. The dollar position has now fallen for five out of the last six weeks and by a total of $-9.73 billion in just the last four weeks alone.

Weekly Speculator Contract Changes:

The individual major currency contract levels saw major movements (weekly changes above the 10,000 contract mark) this week in four of the major currencies.

• Canadian dollar positions advanced by over +10,000 contracts for a fourth week in a row and now the net position is back in bullish territory for the first time since March 14th when net positions totaled +21,458 contracts.
• Australian dollar positions gained by over +14,000 contracts and rose for a fifth straight week to its best speculative level since March 28th.
• Japanese yen positions declined for a fourth straight week and each of the past four weeks has seen a decline above the -10,000 contract mark. The yen is at its most bearish point since January 7th 2014 when positions totaled -128,868 contracts.
• Mexican peso bets rose by over +14,000 contracts this week to a net position of +112,539 contracts. This is the fourth straight week of gains and a new highest net level since May 28th of 2013 when positions totaled +120,864 contracts.

Overall, the major currencies that improved against the US dollar last week were the euro (7,533 weekly change in contracts), British pound sterling (7,665 contracts), Canadian dollar (16,647 contracts), Australian dollar (14,550 contracts), New Zealand dollar (4,076 contracts) and the Mexican peso (14,680 contracts).

The currencies whose speculative bets declined last week versus the dollar were the Japanese yen (-14,794 weekly change in contracts) and the Swiss franc (-3,875 contracts).

Table of Weekly Commercial Traders and Speculators Levels & Changes:

This latest COT data is through Tuesday and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the dollar will gain versus the euro.

Weekly Charts: Large Trader Weekly Positions vs Price

EuroFX:

British Pound Sterling:

Japanese Yen:

Swiss Franc:

Canadian Dollar:

Australian Dollar:

New Zealand Dollar:

Mexican Peso:

*COT Report: The weekly commitment of traders report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The charts overlay the forex closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.) See more information and explanation on the weekly COT report from the CFTC website.

Article by CountingPips.com