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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 traders and currency speculators cut back on their bearish bets for the US dollar this week.
Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $-2.18 billion as of Tuesday December 19th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $5.63 billion from the $-7.81 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 dollar position had fallen for four straight weeks before this week’s rebound. The improvement of the dollar’s position this week was the best one week gain since June 7th 2016 when the aggregate bets rose by $6.44 billion.
This week saw four substantial changes (+ or – 10,000 contracts) in the individual currency contracts for the speculator category.
The euro speculative bets, which rose by over +20,000 contracts last week to the highest position since May 15th 2007, fell sharply this week by -27,665 net contracts. This week’s pullback brought the net contract position to back below the +100,000 contract level.
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The Australian dollar speculative bets dropped huge this week by over +50,000 contracts and brought the overall net position into a small short position. This is the first short level in the AUD since June 13th 2017
The Mexican peso position dropped by over -30,000 contracts this week after falling by over -10,000 last week. The overall net position remains bullish but is at the lowest level since May 2nd when net bets totaled +15,115 contracts.
The Swiss franc position rose by over -11,000 contracts and has risen for three straight weeks. The overall net position remains bearish but is at the lowest bearish level since October 24th when net bets totaled -11,597 contracts.
Overall, the major currencies that improved against the US dollar this week were the British pound sterling (9,000 weekly change in contracts), Swiss franc (11,370 contracts) and the Canadian dollar (3,941 contracts).
The currencies whose speculative bets declined this week versus the dollar were the euro (-27,665 weekly change in contracts), Japanese yen (-250 contracts), Australian dollar (-53,380 contracts), New Zealand dollar (-3,191 contracts) and the Mexican peso (-32,282 contracts).
| Currency | Net Commercials | Comms Weekly Chg | Net Speculators | Specs Weekly Chg |
| EuroFx | -119,761 | 15,769 | 86,224 | -27,665 |
| GBP | -26,832 | -8,890 | 20,388 | 9,000 |
| JPY | 136,603 | -2,352 | -114,373 | -250 |
| CHF | 33,310 | -13,592 | -17,395 | 11,370 |
| CAD | -55,571 | -2,084 | 45,901 | 3,941 |
| AUD | 20,317 | 49,003 | -12,660 | -53,380 |
| NZD | 18,739 | 2,307 | -16,619 | -3,191 |
| MXN | -55,007 | 34,710 | 53,894 | -32,282 |
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
