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US Dollar net speculator positions jumped to $8.64 billion this 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 sharply boosted their bets for the US dollar into the first bullish aggregate position in over a year.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $8.64 billion as of Tuesday June 19th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $16.06 billion from the $-7.42 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).

This week’s rise in US dollar bets brought the aggregate position out of forty-eight straight weeks of bearish positions into the highest bullish level for the dollar since May 16th of 2017 when the aggregate level was $13.5 billion. The turn into a dollar bullish level was made possible by speculators sharply bailing out of (and/or turning more bearish on) many of the major currencies by the tens of thousands this week (see more below).

Weekly Speculator Contract Changes:

This week represented a gigantic week of swings in the major currency futures positions. We saw six substantial changes (+ or – 10,000 contracts) in the individual currency contract levels for the speculators category.

EuroFX bets dropped extremely sharply by over -50,000 contracts this week and by the most on record. The euro bets have now fallen for nine straight weeks and by a total of -115,358 contracts over that time-frame after making a record high bullish level on April 17th

Pound Sterling bets fell by more than -30,000 contracts this week and the standing fell into a new bearish position. This is the first bearish position for the GBP since November of 2017

Japanese yen bets dropped by over -40,000 bets this week and also fell into a bearish position. This brings the JPY to the most bearish level since March 13th of this year

Australian dollar contracts plunged by over -27,000 contracts this week and pushed the current position (12 straight weeks of bearish levels) to the most bearish spot since December 1st of 2015

New Zealand dollar positions decreased by over -22,000 net contracts this week and fell back into a bearish standing for first time in four weeks

Mexican peso speculative bets rose by over +10,000 contracts this week following sharp declines for nine straight weeks. The peso position remains in bearish territory for a third straight week

Overall, the major currencies that declined against the US dollar this week were the euro (-52,107 weekly change in contracts), British pound sterling (-30,175 contracts), Japanese yen (-40,614 contracts), Australian dollar (-27,864 contracts) and the New Zealand dollar (-22,946 contracts).

The currencies whose speculative bets improved this week versus the dollar were the Swiss franc (5,288 weekly change in contracts), Canadian dollar (974 contracts) and the Mexican peso (10,435 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