FX Speculators sharply cut back on US Dollar bearish positions for 2nd week

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US Dollar aggregate speculator positions leveled at $-15.15 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 strongly decreased 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 $-15.15 billion as of Tuesday May 1st, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $4.62 billion from the $-19.77 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 US dollar position improved for a second consecutive week and by a total of +$8.27 billion over that time span. The current dollar position is now at the least bearish level since March 13th when the aggregate position was $-14.61 billion.


Weekly Speculator Contract Changes:

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

Euro speculative bets fell by over -10,000 contracts this week after dropping by over -20,000 contracts last week. The decline in bullish positions the last two weeks followed a push to the record high bullish position of +151,476 contracts reached on April 17th.

British pound sterling speculative bets also dropped by over -10,000 contracts this week and for a second straight week. The fall in bullish positions the last two weeks brings the sterling position to the lowest level in six weeks.

In total, all the major currency’s speculative bets declined this week versus the dollar with decreases in the euro (-10,026 weekly change in contracts), British pound sterling (-10,993 contracts), Japanese yen (-1,988 contracts), Swiss franc (-9,231 contracts), Canadian dollar (-2,391 contracts), Australian dollar (-2,276 contracts), New Zealand dollar (-7,861 contracts) and the Mexican peso (-2,742 contracts).


Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -142,100 14,640 120,568 -10,026
GBP -31,954 16,929 26,372 -10,993
JPY 7,321 6,126 -1,405 -1,988
CHF 39,740 12,558 -19,456 -9,231
CAD 29,245 7,395 -27,535 -2,391
AUD 20,929 5,926 -5,672 -2,276
NZD -15,986 9,315 16,573 -7,861
MXN -90,518 2,919 86,041 -2,742


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


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