Forex Speculators cut US Dollar bullish positions to lowest level in 13 months

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US Dollar net speculator positions fell to $0.135 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 bullish bets for the US dollar last week for a second straight week and to the lowest level in over thirteen months.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar long position totaling $0.135 billion ($135 million) as of Tuesday July 3rd, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly decline of $-4.365 billion from the $4.50 billion 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 aggregate speculative net position for the dollar has fallen by $-7.685 billion in the last two weeks and is now at the lowest level since May 17th 2016 when the net position totaled $-4.19 billion.

 

Weekly Speculator Contract Changes:

The individual major currency contract levels saw major movements this week with five major currencies seeing weekly changes above the 10,000 contract mark.

• The euro saw its speculator position go higher by over +18,000 contracts and pushed its bullish level to the highest since June 13th
• The British pound sterling rose by over +11,000 contracts this week and its short position fell to its best level in six weeks
• Canadian dollar positions rose by over +10,000 contracts for a second straight week and CAD bets overall, have increased for the sixth straight week
• Japanese yen positions dropped sharply for a 2nd straight week and are now at the most bearish level since January 17th 2017
• Australian dollar positions gained by over +12,000 net contracts this week and pushed the AUD bullish level to its best net position in nine weeks at over +32,000 contracts

The major currencies that improved against the US dollar last week were the euro (18,769 weekly change in contracts), British pound sterling (11,366 contracts), Swiss franc (4,556 contracts), Canadian dollar (10,123 contracts), Australian dollar (12,665 contracts), New Zealand dollar (3,900 contracts) and the Mexican peso (3,852 contracts).

The currency whose speculative bets declined last week versus the dollar was just the Japanese yen (-13,686 weekly change in contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency	Net Commercials	Comms Weekly Chg	Net Speculators	Specs Weekly Chg
EuroFx	-100,041	-24,536	77,464	18,769
GBP	24,751	-18,443	-27,767	11,366
JPY	98,183	16,173	-75,036	-13,686
CHF	-2,505	-5,724	-113	4,556
CAD	32,293	-15,685	-39,372	10,123
AUD	-38,910	-18,459	32,414	12,665
NZD	-31,299	-4,974	29,133	3,900
MXN	-93,985	-7,474	84,859	3,852

 

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