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US Dollar net speculator positions improved to $-10.84 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 reduced their aggregate bearish bets for the US dollar again this week.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $-10.84 billion as of Tuesday May 8th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $4.31 billion from the $-15.15 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 has strongly improved for three weeks in a row and by a total of $12.58 billion over that time frame. The dollar level has now landed at its best position since February 20th when the total was $-8.17 billion.

Weekly Speculator Contract Changes:

This week saw three substantial changes (+ or – 10,000 contracts) in the individual currency contracts for the speculator category.

British pound sterling speculative bets dropped sharply by over -10,000 contracts for a third straight week. The recent declines in bullish positions the last two weeks brings the sterling position to the lowest level in eight weeks.

Australian dollar speculative bets fell by over -11,000 contracts this week as the AUD spec bets have now declined for two straight weeks and for six out of the past seven weeks. The overall AUD position has now been in bearish territory for six weeks in a row.

Swiss franc speculative bets decreased by over -13,000 contracts this week and fell for a second week. The overall franc position is now at the most bearish level since June 12th of 2012 when net positions totaled -33,301 contracts.

Overall, the only major currency that improved against the US dollar this week was the Canadian dollar with a gain of 3,674 contracts on the week.

The currencies whose speculative bets declined this week versus the dollar were the euro (-63 weekly change in contracts), British pound sterling (-17,384 contracts), Japanese yen (-4,057 contracts), Swiss franc (-13,146 contracts),  Australian dollar (-11,094 contracts), New Zealand dollar (-4,027 contracts) and the Mexican peso (-9,853 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