Currency Speculators sharply cut Euro & Pound bets, raised Peso, Franc & USD Index bets

July 14, 2018

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Speculators positions rose to $16.41 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 boosted their bets again for the Mexican Peso this week while also adding to US dollar index and Swiss franc positions. Speculators also cut back sharply on the European common currency as well as the British pound sterling.

The broad aggregate dollar position, published by Reuters (chart above), showed that non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar net position totaling $16.41 billion as of Tuesday July 10th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $3.25 billion from the $13.16 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).

This aggregate measure of the dollar position is at the highest level now since March 21st of 2017 when the bullish position totaled $18.44 billion.


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Individual Currency Contract Data this week

For individual currency contracts this week, the non-commercial large futures traders, including hedge funds and large speculators, bet in favor of the the Mexican peso (22,217 weekly change in contracts), Swiss franc (373 contracts) and the US dollar index (13 contracts), according to the data reported through Tuesday July 10th.

On the flip side, the currencies whose speculative bets declined on the week were the euro (-12,390 weekly change in contracts), British pound sterling (-11,622 contracts), Japanese yen (-1,102 contracts), Canadian dollar (-3,439 contracts), Australian dollar (-1,743 contracts) and the New Zealand dollar (-170 contracts).

See more individual currency contract information and charts below.

US Dollar Index positions keep improving

Speculators continued to raise bets for the US dollar index this week (although very slightly by just 13 contracts) to a total a net position of 18,685 contracts. The spec position has now improved for twelve consecutive weeks and to a new highest bullish level since June 13th 2017 when the net positions totaled 28,025 contracts.

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -29,780 18,159 24,357 -12,390
GBP 56,197 6,565 -40,403 -11,622
JPY 63,354 7,655 -39,832 -1,102
CHF 61,688 -203 -40,121 373
CAD 59,195 1,044 -52,887 -3,439
AUD 62,880 334 -40,973 -1,743
NZD 31,242 900 -26,574 -170
MXN -27,459 -24,729 28,132 22,217

 

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:

Euro positions dropped sharply this week by over -12,000 contracts. The euro speculator sentiment has been basically in free fall and has fallen for nine out of the past ten weeks after making a record high above +150,000 contracts in April.


British Pound Sterling:

British pound sterling positions dropped sharply this week by over -10,000 contracts. The GBP has fallen for four weeks in a row to the most bearish level since September of 2017.


Japanese Yen:

Japanese yen positions dipped for a second week this week and for the third week out of the past four. The overall position level is now the most bearish since March 13th.


Swiss Franc:

Swiss franc positions rose this week after two down weeks. The overall net position remains bearish above -40,000 net contracts for a second straight week. The franc position has been bearish for 49 straight weeks now dating back to August 2017.


Canadian Dollar:

Canadian dollar positions dropped for a third straight week this week. The overall net position has now been bearish for sixteen straight weeks and is at the most bearish standing since June 20th 2017.


Australian Dollar:

Australian dollar bets fell this week after two up weeks. The overall net position now remains in a bearish position for a fifteenth straight week.


New Zealand Dollar:

New Zealand dollar bets declined this week for the fourth consecutive week and for the seventh time out of the past ten weeks. The overall net position has now been bearish for four weeks in a row and is in the largest bearish position dating back to 1999, according to our records.


Mexican Peso:

Mexican peso bets jumped again this week by over +22,000 contracts following last week’s +18,425 contract gain. The overall position is back into bullish territory for a second week.

 


*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