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 raised their bullish positions in favor of the US dollar as bets against the Japanese yen increased sharply following the Bank of Japan intervention to weaken the Japanese yen in the Forex market last week. Speculative positions have now totaled an overall bullish dollar bias for an eighth week.
Non-commercial futures traders, usually hedge funds and large speculators, increased their total US dollar long positions to $9.87 billion on October 25th from a total long position of $8.92 billion on October 25th, according to the CFTC COT data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.
EuroFX: Currency speculators decreased their short bets for the euro against the U.S. dollar as of November 1st to a total of 60,060 net short contracts from the previous week’s total of 76,512 net short contracts that were reported as of October 25th. The change in euro positions shows that positions have broken out of the close range they were hovering in for about a month ranging between 73,795 short positions on October 11th and the most recent low of 82,697 short positions on October 4th.
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 have now increased for four consecutive weeks following their six-week decline, according to the data as of November 1st. Pound positions increased to a total of 47,092 net short positions on October 25th following a total of 50,147 short positions as of November 1st. The four-week advancement has brought net short positions from their low point on October 4th of 68,724 to just over 47,000 net short positions last week.
JPY: The Japanese yen net long speculative contracts fell sharply lower last week to the lowest level since July following an increase the previous week. Yen long positions declined by more than half in number to a total of 25,904 net long contracts reported on November 1st following a total of 54,279 net long contracts that were reported on October 25th. The latest data follows the Bank of Japan intervention in the currency markets to weaken the yen against the US dollar and marks the lowest level since July 5th when large speculators net long positions equaled 14,327.
CHF: Swiss franc long positions continued to show little movement by edging lower and staying over on the short side for a third consecutive week. Speculator positions for the Swiss currency futures edged down to a total of 1,746 net short contracts following a total of 1,203 net short contracts as of October 25th. The Swiss currency, a popular safe haven currency, has seen decreased volatility in Forex trading since the Swiss National Bank initiated a policy to peg franc against the euro at the 1.20 level.
CAD: Canadian dollar positions increased higher for a third straight week coming off the lowest bearish level of the year reached on October 11th. CAD net contracts increased to a total of 14,820 short contracts as of November 1st following a total of 17,923 short contracts reported on October 25th. CAD positions reached the lowest level of the year on October 11th when net short positions reached 21,913.
AUD: The Australian dollar long positions increased for the third consecutive week as of November 1st and reached the highest level since September 13th. Australian dollar positions increased to a total net amount of 25,866 long contracts following a total of 23,071 net long contracts reported as of October 25th. The AUD speculative positions have gained four out of the last five weeks after reaching the lowest point of the year on September 27th at 5,167 net long contracts.
NZD: New Zealand dollar futures speculator positions increased for a fourth consecutive week and reached the highest level since September 20th. NZD contracts advanced higher to a total of 10,655 net long contracts as of November 1st following a total of 9,219 net long contracts registered on October 25th.
MXN: Mexican peso contracts edged very slightly higher as of November 1st and off of the lowest level all year registered the week prior. Peso positions edged up to a total of 26,588 net short speculative positions as of November 1st following a total of 27,055 short contracts that were reported on October 25th. Peso contracts have been in a rather tight range for the five consecutive weeks essentially ranging between 25,000 and 27,000 net short contracts.
COT Currency Data Summary as of November 1, 2011
Large Speculators Net Positions vs. the US Dollar
EUR -60060
GBP -47092
JPY +25904
CHF -1746
CAD -14820
AUD +25866
NZD +10655
MXN -26588
