Forex Speculators cut back on their US Dollar bearish positions this week

February 10, 2018

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US Dollar net speculator positions are at $-12.93 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 slightly trimmed their bearish 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 $-12.93 billion as of Tuesday February 6th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $0.8 billion from the $-13.73 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 of the dollar had seen increasing bearishness for the previous five weeks before this week’s small turnaround. The dollar has now remained in a bearish aggregate position for thirty straight weeks dating back to July 18th 2017.


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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 Mexican peso positions rose by over +12,000 bets this week and has seen gains by at least +10,000 contracts for the past four weeks in a row. The sharp gains of the past four weeks has pushed the overall peso level to its highest level in nine weeks at +92,855 contracts.

The Euro speculative positions fell for the first time in the past three weeks and fell from its record high bullish level set last week at +148,742 net contracts.

Overall, the major currencies that improved against the US dollar this week were the Japanese yen (1,820 weekly change in contracts), Swiss franc (86 contracts), Canadian dollar (6,699 contracts), Australian dollar (597 contracts), and the Mexican peso (12,810 contracts).

The currencies whose speculative bets declined this week versus the dollar were the euro (-7,919 weekly change in contracts), British pound sterling (-3,874 contracts) and the New Zealand dollar (-138 contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -179,436 11,751 140,823 -7,919
GBP -46,508 4,135 27,867 -3,874
JPY 112,299 2,095 -112,876 1,820
CHF 18,325 -3,962 -20,241 86
CAD -60,562 -3,136 40,164 6,699
AUD -25,764 -1,401 13,748 597
NZD -4,258 747 3,332 -138
MXN -95,483 -11,877 92,855 12,810

 

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