Currency Speculators continue to ease US Dollar bearish positions

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US Dollar net speculator positions leveled at $-9.82 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 continued to trim their aggregate bearish bets of the US dollar this week and raised their positions for the dollar against most of the major currencies.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $-9.82 billion as of Tuesday May 15th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $1.02 billion from the $-10.84 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).

Speculators have now reduced their aggregate bearish position by a total of $13.6 billion over the past four weeks while the current overall aggregate position is at the lowest bearish level since February 20th when the standing was $-8.17 billion.

 

Weekly Speculator Contract Changes:

This week saw two substantial changes (+ or – 10,000 contracts) in the individual currency contracts for the speculators category.

New Zealand dollar speculative bets dropped sharply by over -10,000 contracts and declined overall for a fourth consecutive week. The decline in NZD bullish positions over the past four weeks brings the speculative net positioning to the lowest level in nine weeks.

Mexican peso speculative bets fell by over -23,000 contracts this week as the MXN speculator bets have  decreased for five consecutive weeks. The overall MXN position has now declined to the lowest level since January 16th when net positions totaled 46,795 contracts.

The major currencies that improved against the US dollar this week were the Japanese yen (9,142 weekly change in contracts) and the Canadian dollar (205 contracts).

The currencies whose speculative bets declined this week versus the dollar were the euro (-5,391 weekly change in contracts), British pound sterling (-3,367 contracts), Swiss franc (-3,791 contracts),  Australian dollar (-6,340 contracts), New Zealand dollar (-10,593 contracts) and the Mexican peso (-23,410 contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -128,943 12,226 115,114 -5,391
GBP -5,044 5,336 5,621 -3,367
JPY 3,475 -5,270 3,680 9,142
CHF 60,299 4,327 -36,393 -3,791
CAD 27,423 -54 -23,656 205
AUD 44,296 10,788 -23,106 -6,340
NZD 664 10,948 1,953 -10,593
MXN -53,658 26,369 52,778 -23,410

 

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