FX Speculators raised US Dollar bullish bets for 1st time in 8 weeks

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US Dollar net speculator positions leveled at $-8.84 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 raised their bullish bets for the US dollar last week.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar short position totaling $-8.84 billion as of Tuesday August 15th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $1.39 billion from the $-10.23 billion total short 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 level had fallen for the previous seven weeks going from a $+7.82 billion position on June 20th to $-10.23 billion on August 8th before this week’s pullback. The dollar level has now been in an overall short standing for five straight weeks for the first time in over a year.

 

Weekly Speculator Contract Changes:

The individual major currencies saw four weekly changes above the (+ or -) 10,000 contract mark this week in the speculators category.

• Japanese yen bets advanced by over +18,000 contracts this week and have gained for four consecutive weeks. The overall short position continues to decline further below the -100,000 net contract level after reaching a recent high short level of -126,919 contracts on July 18th.
• The euro position fell by over -14,000 contracts this week and has now declined three out of the past four weeks after ascending to the highest bullish level since May 3rd 2011.
• Canadian dollar positions dropped by over -11,000 positions this week after rising for eleven straight weeks that brought the CAD spec level from highly bearish to a strong bullish level.
• Mexican peso bets decreased by over -11,000 contracts this week and declined for a second straight week. MXN positions, despite the fall, are in very bullish territory with a net standing of +94,849 contracts.

In total, the major currencies that improved against the US dollar last week were the Japanese yen (18,321 weekly change in contracts), Swiss franc (221 contracts) and the Australian dollar (1,602 contracts).

The currencies whose speculative bets declined last week versus the dollar were the euro (-14,418 weekly change in contracts), British pound sterling (-6,700 contracts),  Canadian dollar (-11,472 contracts),  New Zealand dollar (-8,646 contracts) and the Mexican peso (-11,588 contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency	Net Commercials	Comms Weekly Chg	Net Speculators	Specs Weekly Chg
EuroFx	-104,369	17,421	79,267	-14,418
GBP	33,275	12,537	-31,860	-6,700
JPY	89,173	-20,996	-77,492	18,321
CHF	4,372	924	-1,181	221
CAD	-69,109	15,876	51,349	-11,472
AUD	-77,465	-1,990	59,612	1,602
NZD	-27,585	8,307	24,839	-8,646
MXN	-100,573	12,437	94,849	-11,588

 

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