InvestMacro

Sri Lanka’s crisis: Can the South Asian economy break from the past and find a route to stability?

By Vidhura S Tennekoon, Indiana University

Sri Lanka has a new president and prime minister – but a change in who leads the crisis-hit South Asian nation alone will not solve the country’s severe economic problems.

Ranil Wickremesinghe – who on July 20, 2022, was voted in by lawmakers to replace fleeing former president Gotabaya Rajapaksa – and his appointed premier Dinesh Gunawardena inherit an economy grappling with record inflation as high as 59%, a currency that has lost almost half its value since March 2022 and severe shortages of daily necessities such as food and fuel. Nearly all economic activity in the country has ground to a halt.

The government’s deficit is so large it can’t afford to pay public workers, and the central bank has almost no foreign currency – needed to finance imports and pay back foreign debt.

In short, Sri Lanka is facing an unprecedented economic crisis, placing tremendous pressure on the new leaders to act fast to fix things.

As an economist and former official at the Central Bank of Sri Lanka, I believe the path forward will be difficult. The country will need to break with past policies and practices that put it in a financial hole while putting in place reforms to get the economy back on track. In particular, there are four key economic challenges the new government will have to address, though they’re all interconnected.

Addressing Sri Lankans’ immediate needs

To avoid the fate of his now exiled predecessor Gotabaya Rajapaksa, President Wickremesinghe will have to address the immediate needs of his people.

After being sworn in, Wickremesinghe said his priority was to ensure that people are able to eat three meals a day.

While food inflation has reached 76%, prices of many basic food items have increased by a higher margin – rice by 160%, wheat flour by 200% and sugar by 164%. To put that in context, a preschool teacher earning minimum wage would need more than a day’s wages to purchase a kilogram (2.2 pounds) of sugar and a kilogram of wheat flour or rice. A cylinder of cooking gas, if they were lucky to find one, would cost more than a half-month’s salary.

Cost of living ranks alongside other pressing issues. Reopening the shuttered schools and universities is another priority. The other urgent need is restoring transportation services. With no fuel to purchase, private bus services are in limbo and public transportation has become an adventure ride, with passengers dangling from the door and windows and even sitting inside the luggage box.

Restoring transportation and electricity services requires foreign currency to import fuel, but support from the International Monetary Fund, which provides financial help to struggling economies through loan packages, is months away. Unless the new president can persuade its regional powerhouses – India and China – to provide more help, economic hardships will continue and life in Sri Lanka will not be normal.

In the past, Sri Lanka has been able to rely on tourism to help bring revenue to the island nation. But this will be impossible while social unrest continues and shortages of essentials limit the country’s ability to serve visitors. Meanwhile, remittances from overseas Sri Lankans have also suffered because of a lack of confidence in the national currency, known as the rupee.

As Wickremesinghe has noted, things will get worse before they get better.

Balancing the budget

The next item on the president’s to-do list will likely be finding a way to bring the budget deficit down. Last year, expenses were 240% of revenue, and 91% more was needed to repay debt. Money printing covered a large portion of this gap but only exacerbated inflation.

The primary reason for Sri Lanka’s current crisis is decades of fiscal mismanagement, with too much spending and too little revenue.

Fixing this problem will require a combination of higher taxes and significant budget cuts. But the budget gap is too wide to eliminate completely the need for money printing. The best that can be hoped for is an aggressive reduction.

Restructuring Sri Lanka’s huge debt

Such budgetary reforms will likely be necessary to solve another challenge Sri Lanka faces: overseas debt.

Sri Lanka has amassed about US$51 billion in foreign debt over the past decades but has virtually no foreign currency with which to pay it back. The government suspended payments on foreign debt in April, sending it into default.

At the end of 2021, about 45% of the debt was owed to private investors, while the rest belonged to countries and multinational institutions. The Asian Development Bank owned the biggest share, at 16%, while Japan, China and the World Bank held 10% apiece.

For Sri Lanka to emerge from its crisis, it will need significant help from the IMF. But the IMF requires assurances that Sri Lanka’s debt sustainability be restored before lending it money.

And other international organizations, such as the World Bank, will not be willing to lend Sri Lanka more until the country signs an agreement with the IMF. And U.S. lawmakers have recently suggested IMF support will be contingent on Sri Lanka’s increasing the independence of its central bank, fighting corruption and doing more to promote the rule of law.

While G-7 countries, the group of leading economies, including Japan, appear willing to help Sri Lanka in its effort to restructure its debt, some bondholders – such as Caribbean-based Hamilton Reserve Bank, which holds just $250 million worth – have already taken legal action to claim their dues.

In May, Sri Lanka took a first step toward restructuring its debt, but it may take several months before the country is able to successfully negotiate with its creditors to ensure debt sustainability.

Garnering public support for reforms

Wickremesinghe’s biggest and most unenviable challenge, however, is less about the economy and more about the politics of fixing it.

He won’t be able to do much about Sri Lanka’s economy until he’s able to bring about political stability. And right now, Sri Lanka remains in turmoil.

Wickremesinghe, who previously served as prime minister appointed by his toppled predecessor, will need a wide mandate and support from opposition politicians if he is to drastically change Sri Lanka’s policies. Upon election, he immediately urged his rivals to join him and “work together to bring the country out of the crisis,” adding, “Our divisions are now over.”

He will also need to address protesters’ demands over reducing executive powers while bringing in strong anti-corruption measures and strengthening democratic institutions.

Yet many doubt Wickremesinghe’s ability to unite Sri Lanka and question his mandate to serve out the remaining term of the presidency. He has been a target of protesters since being appointed president. And a confrontation between armed forces and protesters soon after Wickremesinghe took power doesn’t bode well.

Turning around an economy so deep in crisis will take time. Inflation in Sri Lanka is not believed to have peaked yet, and people will continue to face economic hardships for some time.

But political stability will be needed before Sri Lanka can get out of its economic mess. The fiscal reforms expected by the IMF will be painful and will be viable only with public support, and that of all major political parties in Sri Lanka’s Parliament.

About the Author:

Vidhura S Tennekoon, Assistant Professor of Economics, Indiana University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Economics & Fundamentals Financial News

25 Jul

Europe On Sale: Get It While U Can

By Elliott Wave International

On July 13 and 14, the euro and the U.S. dollar briefly traded at parity — for the first time in 20 years.

Just 19 months ago, EURUSD was at $1.2350. It’s quietly dropped 20%+ since.

Quietly? Yeah, because of all the other fireworks in the market drowned out the news.

What would you have done with this knowledge a year and a half ago?

For one thing, you’d have put off that European vacation until now!

Who could have known? EWI subscribers. Check out this forecast from EWI back on January 8, 2021:

It appears that currencies are delivering the early New Year trend reversal that often occurs. The [Euro]’s high at 1.2350 on Wednesday, January 6, completes the five-wave rally from at least November 4, 2020 (1.1604) and likely from March 23, 2020 (1.0635)…Greater bearish potential exists…

Every student of Elliott knows that when five waves finish, you should anticipate a reversal of equal degree.

Here’s what happened since:

Mmmm, I love a good chart.

And a great tweet. Tip of the hat to Mr_Cuddlez!

So, are you ready to catch the next big euro move?

EWI’s Chief Market Analyst Steven Hochberg guides our Financial Forecast Service subscribers 3X/week through the twist and turns in the euro (and dollar) — plus, U.S. stock indexes, bonds, gold and silver — inside his Short Term Update.

Right now, read our forecasts for all of the markets listed above (and more) inside our Financial Forecast Service Test Drive — just $17 for a full week’s access.

Join the Financial Forecast Service Test Drive now.

Hurry: Your one-time Test Drive opportunity ends Thursday, July 28th.

This article was syndicated by Elliott Wave International and was originally published under the headline Europe On Sale: Get It While U Can. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Financial News Forex and Currency News

23 Jul

Euro Currency bets continue to decline while US Dollar Index Speculator positions bounced back

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday July 19th and shows a quick view of how large traders (for-profit speculators and commercial entities) 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 euro will decline versus the dollar.

Weekly Speculator Changes

COT currency market speculator bets were mostly higher this week as six out of the eleven currency markets we cover had higher positioning while the other five markets had lower speculator contracts.

Leading the gains for the currency markets was the Canadian dollar (3,162 contracts) and the British pound sterling (1,839 contracts) while the New Zealand dollar (1,612 contracts), the Japanese yen (773 contracts), the US Dollar Index (715 contracts) and the Brazilian real (270 contracts) also had higher speculator bets for the week.

The currencies leading the declines in speculator bets this week were the Euro (-17,501 contracts) and Mexican peso (-7,522 contracts) with the Swiss franc (-2,188 contracts), the Australian dollar (-1,548 contracts) and Bitcoin (-335 contracts) also registering lower bets on the week.

Highlighting the currencies data is the Euro’s continued decline in speculator bets. The Euro’s speculator positioning declined for the third straight week and for the sixth time in the past seven weeks which has taken off a total of -95,017 contracts from the speculator standing in that seven-week period. This decline has quickly taken the Euro speculator contracts from +52,272 contracts on May 31st to a total of -42,745 contracts this week. The EURUSD’s spot price this week had a modest bounce-back following a three-week decline and a dip below parity with the US Dollar last week. The EURUSD currency pair closed the week near the 1.0215 spot exchange rate after gaining by approximately 1.25 percent for the week.

The US Dollar Index speculator bets, meanwhile, rose this week for the first time in the past four weeks and remain near the top of their speculative range. Dollar speculators had taken a total of -6,656 contracts off the bullish position in the previous three weeks and pulled the net bullish position below +40,000 contracts for the first time since June 28th before this week’s small rebound. Speculators have been uber-bullish recently on the dollar and the past four months has seen a strong surge to the upside. Since April, the US Dollar Index price has been higher in twelve out of fifteen weeks and culminated with the highest DXY price in approximately twenty years above 109.00. The dollar strength has been punishing the other major currencies as the Euro and Yen have hit multi-decade lows (versus the USD) with the US Federal Reserve sharply raising interest rates to combat inflation. The Dollar Index spot price cooled off this week by approximately 1.30 percent and closed around the 106.50 exchange rate.

Data Snapshot of Forex Market Traders | Columns Legend

Jul-19-2022	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	59,214	87	39,069	90	-41,500	10	2,431	43
EUR	694,106	80	-42,745	22	17,430	81	25,315	16
GBP	228,051	56	-57,250	33	70,299	71	-13,049	29
JPY	229,449	75	-59,225	32	73,082	71	-13,857	25
CHF	41,855	25	-10,912	29	19,205	74	-8,293	29
CAD	142,216	25	6,667	47	-8,746	61	2,079	34
AUD	155,246	49	-43,148	45	49,276	56	-6,128	37
NZD	45,467	35	-3,671	65	7,227	42	-3,556	11
MXN	196,123	47	-30,760	14	27,890	84	2,870	55
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	42,452	30	10,475	61	-11,580	40	1,105	78
Bitcoin	14,512	84	-506	71	-66	0	572	26

Strength Scores

Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the US Dollar Index (90.1 percent) leads the currency markets once again and remains in a bullish extreme position. Bitcoin (71.1 percent), the New Zealand Dollar (65.1 percent) and the Brazilian Real (60.7 percent) come in as the next highest in strength scores – also for a second straight week. On the downside, the Mexican Peso (14.2 percent) remains the currency with the lowest strength level currently and is followed by the EuroFX (21.9 percent) which is quickly getting more bearish by the week.

Strength Statistics:
US Dollar Index (90.1 percent) vs US Dollar Index previous week (88.9 percent)
EuroFX (21.9 percent) vs EuroFX previous week (27.3 percent)
British Pound Sterling (32.8 percent) vs British Pound Sterling previous week (31.4 percent)
Japanese Yen (32.4 percent) vs Japanese Yen previous week (31.9 percent)
Swiss Franc (28.8 percent) vs Swiss Franc previous week (34.4 percent)
Canadian Dollar (46.8 percent) vs Canadian Dollar previous week (43.3 percent)
Australian Dollar (44.8 percent) vs Australian Dollar previous week (46.3 percent)
New Zealand Dollar (65.1 percent) vs New Zealand Dollar previous week (62.4 percent)
Mexican Peso (14.2 percent) vs Mexican Peso previous week (17.4 percent)
Brazil Real (60.7 percent) vs Brazil Real previous week (60.4 percent)
Russian Ruble (31.2 percent) vs Russian Ruble previous week (31.9 percent)
Bitcoin (71.1 percent) vs Bitcoin previous week (77.2 percent)

Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that the New Zealand Dollar (27.0 percent) leads the past six weeks trends for the currency markets this week. The Japanese Yen (20.0 percent) and the Swiss Franc (13.2 percent) fill out the top movers in the trends data. The Brazilian Real (-35.6 percent) leads the downside trend scores currently while the next markets with lower trend scores were the EuroFX (-28.6 percent) followed by the Mexican Peso (-27.1 percent).

Strength Trend Statistics:
US Dollar Index (1.9 percent) vs US Dollar Index previous week (1.4 percent)
EuroFX (-28.6 percent) vs EuroFX previous week (-23.8 percent)
British Pound Sterling (9.8 percent) vs British Pound Sterling previous week (10.8 percent)
Japanese Yen (20.0 percent) vs Japanese Yen previous week (21.2 percent)
Swiss Franc (13.2 percent) vs Swiss Franc previous week (29.7 percent)
Canadian Dollar (8.7 percent) vs Canadian Dollar previous week (11.8 percent)
Australian Dollar (4.4 percent) vs Australian Dollar previous week (6.6 percent)
New Zealand Dollar (27.0 percent) vs New Zealand Dollar previous week (22.6 percent)
Mexican Peso (-27.1 percent) vs Mexican Peso previous week (-25.0 percent)
Brazil Real (-35.6 percent) vs Brazil Real previous week (-34.5 percent)
Russian Ruble (-15.6 percent) vs Russian Ruble previous week (9.1 percent)
Bitcoin (-18.1 percent) vs Bitcoin previous week (-10.4 percent)

Individual Market Charts:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week rose to a net position of 39,069 contracts in the data reported through Tuesday. This was a weekly advance by 715 contracts from the previous week which had a total of 38,354 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.1 percent. The commercials are Bearish-Extreme with a score of 9.9 percent and the small traders (not shown in chart) are Bearish with a score of 43.1 percent.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	84.8	4.9	8.6
– Percent of Open Interest Shorts:	18.9	74.9	4.5
– Net Position:	39,069	-41,500	2,431
– Gross Longs:	50,234	2,873	5,069
– Gross Shorts:	11,165	44,373	2,638
– Long to Short Ratio:	4.5 to 1	0.1 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	90.1	9.9	43.1
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.9	0.6	-16.3

Euro Currency Futures:

The Euro Currency large speculator standing this week was a net position of -42,745 contracts in the data reported through Tuesday. This was a sharp weekly drop of -17,501 contracts from the previous week which had a total of -25,244 net contracts.

The current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.9 percent. The commercials are Bullish-Extreme with a score of 81.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 16.3 percent.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.2	57.3	11.9
– Percent of Open Interest Shorts:	34.4	54.8	8.3
– Net Position:	-42,745	17,430	25,315
– Gross Longs:	195,875	397,991	82,676
– Gross Shorts:	238,620	380,561	57,361
– Long to Short Ratio:	0.8 to 1	1.0 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.9	81.0	16.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-28.6	30.0	-20.4

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week totaled a net position of -57,250 contracts in the data reported through Tuesday. This was a weekly gain of 1,839 contracts from last week’s total of -59,089 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.8 percent. The commercials are Bullish with a score of 71.3 percent and the small traders (not shown in chart) are Bearish with a score of 28.6 percent.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.0	74.6	8.7
– Percent of Open Interest Shorts:	39.1	43.7	14.4
– Net Position:	-57,250	70,299	-13,049
– Gross Longs:	31,943	170,053	19,882
– Gross Shorts:	89,193	99,754	32,931
– Long to Short Ratio:	0.4 to 1	1.7 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.8	71.3	28.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.8	-6.0	-7.0

Japanese Yen Futures:

The Japanese Yen large speculator standing this week was a net position of -59,225 contracts in the data reported through Tuesday. This was a weekly rise of 773 contracts from the previous week which had a total of -59,998 net contracts.

The current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.4 percent. The commercials are Bullish with a score of 71.3 percent and the small traders (not shown in chart) are Bearish with a score of 25.3 percent.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.7	69.0	10.7
– Percent of Open Interest Shorts:	44.5	37.2	16.7
– Net Position:	-59,225	73,082	-13,857
– Gross Longs:	42,880	158,427	24,496
– Gross Shorts:	102,105	85,345	38,353
– Long to Short Ratio:	0.4 to 1	1.9 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.4	71.3	25.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	20.0	-17.6	7.3

Swiss Franc Futures:

The Swiss Franc large speculator standing this week totaled a net position of -10,912 contracts in the data reported through Tuesday. This was a weekly decline of -2,188 contracts from the previous week which had a total of -8,724 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 28.8 percent. The commercials are Bullish with a score of 74.1 percent and the small traders (not shown in chart) are Bearish with a score of 29.5 percent.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.6	59.7	23.5
– Percent of Open Interest Shorts:	42.7	13.9	43.3
– Net Position:	-10,912	19,205	-8,293
– Gross Longs:	6,948	25,008	9,819
– Gross Shorts:	17,860	5,803	18,112
– Long to Short Ratio:	0.4 to 1	4.3 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	28.8	74.1	29.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.2	-12.8	9.5

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week was a net position of 6,667 contracts in the data reported through Tuesday. This was a weekly gain of 3,162 contracts from the previous week which had a total of 3,505 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.8 percent. The commercials are Bullish with a score of 61.4 percent and the small traders (not shown in chart) are Bearish with a score of 34.3 percent.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.6	47.1	22.1
– Percent of Open Interest Shorts:	24.9	53.3	20.6
– Net Position:	6,667	-8,746	2,079
– Gross Longs:	42,040	67,038	31,391
– Gross Shorts:	35,373	75,784	29,312
– Long to Short Ratio:	1.2 to 1	0.9 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	46.8	61.4	34.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	8.7	3.9	-24.9

Australian Dollar Futures:

The Australian Dollar large speculator standing this week was a net position of -43,148 contracts in the data reported through Tuesday. This was a weekly lowering of -1,548 contracts from the previous week which had a total of -41,600 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.8 percent. The commercials are Bullish with a score of 55.6 percent and the small traders (not shown in chart) are Bearish with a score of 37.5 percent.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.7	66.0	11.2
– Percent of Open Interest Shorts:	47.5	34.3	15.2
– Net Position:	-43,148	49,276	-6,128
– Gross Longs:	30,578	102,518	17,420
– Gross Shorts:	73,726	53,242	23,548
– Long to Short Ratio:	0.4 to 1	1.9 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	44.8	55.6	37.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.4	1.4	-16.1

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week was a net position of -3,671 contracts in the data reported through Tuesday. This was a weekly increase of 1,612 contracts from the previous week which had a total of -5,283 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 65.1 percent. The commercials are Bearish with a score of 41.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.8 percent.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	34.7	59.2	5.4
– Percent of Open Interest Shorts:	42.8	43.3	13.2
– Net Position:	-3,671	7,227	-3,556
– Gross Longs:	15,791	26,905	2,444
– Gross Shorts:	19,462	19,678	6,000
– Long to Short Ratio:	0.8 to 1	1.4 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	65.1	41.5	10.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	27.0	-23.8	-7.4

Mexican Peso Futures:

The Mexican Peso large speculator standing this week was a net position of -30,760 contracts in the data reported through Tuesday. This was a weekly decrease of -7,522 contracts from the previous week which had a total of -23,238 net contracts.

The current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.2 percent. The commercials are Bullish-Extreme with a score of 84.4 percent and the small traders (not shown in chart) are Bullish with a score of 55.2 percent.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.0	46.6	3.0
– Percent of Open Interest Shorts:	65.6	32.4	1.6
– Net Position:	-30,760	27,890	2,870
– Gross Longs:	97,965	91,458	5,972
– Gross Shorts:	128,725	63,568	3,102
– Long to Short Ratio:	0.8 to 1	1.4 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	14.2	84.4	55.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-27.1	27.5	-10.7

Brazilian Real Futures:

The Brazilian Real large speculator standing this week reached a net position of 10,475 contracts in the data reported through Tuesday. This was a weekly advance of 270 contracts from the previous week which had a total of 10,205 net contracts.

The current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 60.7 percent. The commercials are Bearish with a score of 40.0 percent and the small traders (not shown in chart) are Bullish with a score of 77.7 percent.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	48.5	43.7	7.3
– Percent of Open Interest Shorts:	23.9	71.0	4.7
– Net Position:	10,475	-11,580	1,105
– Gross Longs:	20,600	18,569	3,092
– Gross Shorts:	10,125	30,149	1,987
– Long to Short Ratio:	2.0 to 1	0.6 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	60.7	40.0	77.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-35.6	36.5	-13.4

Bitcoin Futures:

The Bitcoin large speculator standing this week was a net position of -506 contracts in the data reported through Tuesday. This was a weekly decline of -335 contracts from the previous week which had a total of -171 net contracts.

The current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.1 percent. The commercials are Bullish with a score of 53.9 percent and the small traders (not shown in chart) are Bearish with a score of 25.9 percent.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	75.2	3.5	9.4
– Percent of Open Interest Shorts:	78.7	4.0	5.4
– Net Position:	-506	-66	572
– Gross Longs:	10,909	514	1,360
– Gross Shorts:	11,415	580	788
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	71.1	53.9	25.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-18.1	26.9	12.1

Article By InvestMacro – Receive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures 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) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

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23 Jul

COT Week 29 Charts: Precious Metals Speculator bets continue weakness led by Gold & Silver

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday July 19th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.