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The latest data for the weekly Commitment of Traders (COT) report, released by the Commodity Futures Trading Commission (CFTC) on Friday, showed that large forex traders and currency speculators increased their bearishness in the US dollar for a fourth straight week while betting strongly for the euro.
Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $-7.81 billion as of Tuesday December 12th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly decline of $-3.53 billion from the $-4.28 billion total 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 position is at the lowest level since October 24th when the total position was $-8.02 billion. The aggregate US dollar position has fallen by $-7.167 in the past four weeks.
Weekly Speculator Contract Changes: Euro Positions at highest since 2007
This week saw two substantial changes (+ or – 10,000 contracts) in the individual currency contracts for the speculator category.
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The euro speculative bets jumped by over +20,000 contracts this week to a net position of +113,889 contracts. This bullish level is now the highest position since May 15th 2007 when net positions totaled +119,538 contracts. (chart provided below)
The Mexican peso position fell by over -10,000 contracts this week after gaining for five straight weeks. The overall net position remains highly bullish with net contracts above the +80,000 level for four straight weeks.
Overall, the major currencies that improved against the US dollar this week were the euro (20,783 weekly change in contracts), British pound sterling (4,982 contracts), Japanese yen (144 contracts), Swiss franc (802 contracts) and Australian dollar (392 contracts).
The currencies whose speculative bets declined this week versus the dollar were the Canadian dollar (-506 contracts), New Zealand dollar (-535 contracts) and the Mexican peso (-10,347 contracts).
Table of Weekly Commercial Traders and Speculators Levels & Changes:
| Currency | Net Commercials | Comms Weekly Chg | Net Speculators | Specs Weekly Chg |
| EuroFx | -135,530 | -10,996 | 113,889 | 20,783 |
| GBP | -17,942 | -848 | 11,388 | 4,982 |
| JPY | 138,955 | 6,927 | -114,123 | 144 |
| CHF | 46,902 | 1,143 | -28,765 | 802 |
| CAD | -53,487 | 2,618 | 41,960 | -506 |
| AUD | -28,686 | 4,387 | 40,720 | 392 |
| NZD | 16,432 | 1,447 | -13,428 | -535 |
| MXN | -89,717 | 10,906 | 86,176 | -10,347 |
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.
*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
