By CountingPips.com
The latest Commitments of Traders (COT) report, released on Friday by the Chicago Mercantile Exchange, showed that futures speculators continued to increase their bets in favor of the euro and other major currencies against the US dollar. Non-commercial futures positions, those taken by hedge funds and large speculators, were net long the euro against the U.S. dollar by 48,243 contracts as of October 5th following net positioning of 35,330 contracts on September 28th. The latest data was the best euro futures positioning in over a year and marked a fifth straight week of improvement in favor of the euro.
The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. Open interest is the number of open contracts that have not been closed by a transaction or by delivery.
The British pound sterling had been the last major currency on the short side against the dollar in the CME futures market but the British currency’s fortunes have changed as speculators increased their bets for the GBP to a positive net amount of contracts. The euro, Australian dollar, New Zealand dollar, Japanese yen, Canadian dollar, Swiss franc and Mexican peso all continued to have a net positive amount of contracts.
The British pound sterling positions increased to a net of 9,403 contracts after being short on September 28th by -2,194 positions. This is the fourth straight week of improvement for the British pound future positions and the best showing for GBP contracts in over a year.
The Japanese yen net long contracts increased to 49,206 as of October 5th from 28,666 net long contracts reported on September 28th. Yen positions have now climbed for two straight weeks after declining on September 21st as many speculators may have decreased their yen long positions due to the Bank of Japan’s currency intervention.
The Canadian dollar positions increased higher to a net total of 42,678 contracts after totaling 27,870 net longs on September 28th and rose to their highest level since May.
Swiss franc long positions advanced to 22,599 long contracts as of October 5th after totaling a net of 19,993 long contracts on September 28th. This is the highest level for long Swiss franc positions since early in December 2009 when long contracts totaled 24,725.
The Australian dollar positions edged very slightly lower after reaching their highest level since April on September 28th. AUD futures contracts declined to a net amount of 69,036 long contracts as of October 5th from 69,533 long contracts on September 28th.
New Zealand dollar futures positions declined for second straight week to a total of 16,334 long contracts after a total of 17,270 long contracts the week before.
Mexican peso long contracts jumped higher as of October 5th to 85,764 net long positions from 66,591 longs the week prior. Peso positions are at their highest since May and have now risen for four consecutive weeks.
COT Data Summary as of October 5th, 2010
Large Speculators Net Positions vs. the US Dollar
Euro: +48,243 contracts from +35,330 contracts on September 28th
British pound sterling: +9,403 contracts from -2,194 contracts
Australian dollar: +69,036 contracts from +69,533 contracts
Canadian dollar: +42,678 contracts from +27,870 contracts
Japanese yen: +49,206 contracts from +28,666 contracts
Mexican peso: +85,764 contracts from +66,591 contracts
New Zealand dollar: +16,334 contracts from +17,270 contracts
Swiss franc: +22,599 contracts from +19,993 contracts
Go to the Commitment of Traders CME raw futures data
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