Forex Speculators reduced aggregate US Dollar positions this week

January 6, 2018

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US Dollar net speculator positions leveled at $-4.62 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 reduced their bets for the US dollar this week.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $-4.62 billion as of Tuesday January 2nd, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly decline of $-4.162 billion from the $-0.458 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 speculative position had improved for the dollar in the previous two weeks before this week’s decline. The current level is the lowest level of the past three weeks and the dollar has remained in bearish territory for twenty-five consecutive weeks through January 2nd.


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Weekly Speculator Contract Changes:

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

The euro speculative bets jumped by over +35,000 bets this week and pushed the bullish net position level back over the +100,000 net contract level for the second time in four weeks. Euro bets have gained for two straight weeks and for four out of the last five weeks.

The major currencies that improved against the US dollar this week were the euro (35,720 weekly change in contracts), British pound sterling (3,559 contracts) and the New Zealand dollar (601 contracts).

The currencies whose speculative bets declined this week versus the dollar were the Japanese yen (-5,680 weekly change in contracts), Swiss franc (-2,330 contracts), Canadian dollar (-2,607 contracts), Australian dollar (-6,387 contracts) and the Mexican peso (-1,326 contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -165,932 -34,520 127,868 35,720
GBP -30,767 -8,900 16,235 3,559
JPY 134,872 2,384 -121,766 -5,680
CHF 30,127 158 -16,232 -2,330
CAD -30,882 -403 14,739 -2,607
AUD 15,533 527 -20,026 -6,387
NZD 18,647 -974 -16,985 601
MXN -34,491 2,722 35,058 -1,326

 

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