Currency Speculators continue boosting US Dollar bets higher

August 11, 2018 – By CountingPips.comGet our weekly COT Reports by Email

US Dollar aggregate speculator positions rose to $22.02 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 boost their bets in favor of the US dollar this week while sharply cutting back on euro and British pound bets.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar aggregate net position totaling $22.02 billion as of Tuesday August 7th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly rise of $1.96 billion from the $20.06 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 has now risen for seven out of the past eight weeks to the highest level since January 17th of 2107 when the aggregate measure totaled +$24.44 billion.


US Dollar Index Speculator Positions rise for 16th Straight Week

The latest data also showed that currency speculators continued to raise their bets in favor of the US Dollar Index futures for a sixteenth consecutive week.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 30,102 contracts in the data reported through Tuesday August 7th. This was a weekly gain of 1,646 contracts from the previous week which had a total of 28,456 net contracts.

The bullish improvement in the US Dollar Index positions dates back to April 24th (sixteen straight weeks) and the overall net standing is now at the best level since May 23rd of 2017 when bullish bets equaled 31,324 contracts.


Individual Currency Contracts Data this week

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

  • Euro positions dropped this week by over -10,000 bets and fell for a second straight week. The overall net position is now at the lowest level since May 2nd 2017 when net positions totaled -1,653 contracts. The euro position has seen a rather swift decline after reaching a record high bullish position recently on April 17th (+151,476 contracts).
  • British pound sterling positions declined by over -11,000 bets this week and have now dropped for three straight weeks (as well as seven out of the past eight weeks). The bearish net standing is at the highest bearish level since May 2nd of 2017 when the position totaled -81,364 contracts.

Overall, the non-commercial speculators bet in favor of the US Dollar Index (1,646 weekly change in contracts), Japanese yen (5,650 contracts), Canadian dollar (6,671 contracts) and the Mexican peso (6,745 contracts) this week.

The currencies whose speculative bets declined this week were the euro (-12,260 weekly change in contracts), British pound sterling (-11,466 contracts), Swiss franc (-1,686 contracts),  Australian dollar (-3,064 contracts) and the New Zealand dollar (-847 contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -26,094 20,500 10,565 -12,260
GBP 76,239 14,647 -58,852 -11,466
JPY 86,358 -6,749 -62,807 5,650
CHF 66,108 1,235 -46,108 -1,686
CAD 29,728 -5,376 -24,898 6,671
AUD 76,617 5,470 -54,540 -3,064
NZD 28,648 383 -24,527 -847
MXN -36,004 -7,342 33,260 6,745

 

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