By CountingPips.com
The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators continued to add to their bets in favor of the US dollar as risk aversion was the dominant trading theme. Non-commercial futures speculative contracts, positions usually taken by hedge funds and large traders, decreased their long positions in the Swiss franc, Australian dollar and the New Zealand dollar directly against the US dollar while increasing bearish bets for the euro, British pound sterling, Canadian dollar and the Mexican peso, according to data on September 20th.
Japanese yen positions were the only currency bets against the US dollar that advanced last week.
EuroFX: Currency speculators continued to decrease their futures positions for the euro against the U.S. dollar for a fifth consecutive week. Euro positions dropped as of September 20th to a total of 79,460 net short contracts from the previous week’s total of 54,459 net short contracts on September 13th. Euro positions are now at their lowest point since June 8, 2010 when net contracts were on the short side at -111,945.
The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) 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. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.
GBP: British pound sterling positions sharply declined for the fourth consecutive week to the lowest level since June 2010. Pound positions decreased to a total of 59,755 short positions following a total of 26,193 short positions as of September 13th.
JPY: The Japanese yen net contracts rose for a second straight week as of September 20th from the previous week. Yen net long positions increased to a total of 45,617 net long contracts reported on September 20th following a total of 34,955 net long contracts reported on September 13th.
CHF: Swiss franc long positions declined for a fourth consecutive week as of September 20th. Speculators decreased bets on Swiss currency futures to a total of 4,221 net long contracts following a total of 5,493 net long contracts as of September 13th. The Swiss currency, usually a popular safe haven currency, has been stuck in neutral since the Swiss National Bank implemented a policy to fight the appreciation of the franc and maintain pegged against the euro at the 1.20 level.
CAD: Canadian dollar positions edged slightly higher after falling for two consecutive weeks but remained on the short side for a second straight week. CAD net contracts edged up to a total of 5,458 short contracts as of September 20th following a decline to a total of 6,303 net short contracts on September 13th.
AUD: The Australian dollar long positions declined for a second straight week as of September 20th after rising for four consecutive weeks. AUD futures positions fell to a total net amount of 23,095 long contracts following a total of 36,934 net long contracts reported as of September 13th. The latest speculators data marks the lowest level for Aussie positions since July of 2010.
NZD: New Zealand dollar futures positions fell to their lowest level since the middle of May, according to the data reported on September 20th. NZD contracts fell lower to a total of 13,565 net long contracts following a total of 17,664 net long contracts registered on September 13th.
MXN: Mexican peso contracts continued lower and declined for a seventh straight week to remain on a bearish front for a second straight week. Peso positions declined to a total of 16,890 net short speculative positions as of September 20th following a total of 1,209 short contracts that were reported as of September 13th.
COT Data Summary as of September 20, 2011
Large Speculators Net Positions vs. the US Dollar
EUR -79,460
GBP -59,755
JPY +45,617
CHF +4,221
CAD -5,458
AUD +23,095
NZD +13,565
MXN -16,890
