Forex Speculators raise US Dollar Index Speculators bullish bets. Euro & Peso bets fall

November 10, 2018

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US Dollar Index speculator positions go higher once again this week

Large currency speculators continued to raise their bullish bets for the US Dollar Index futures markets while sharply cutting back on their Euro and Mexican peso bets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 40,282 contracts in the data reported through Tuesday November 6th. This was a weekly rise of 759 net contracts from the previous week which had a total of 39,523 net contracts.

This week’s net position was the result of the gross bullish position tumbling by -1,564 contracts to a weekly total of 48,295 contracts but being more than offset by the gross bearish position which saw a decline by -2,323 contracts for the week to a total of 8,013 contracts.

The speculative US Dollar Index position continued to steadily rise for a sixth straight week and has now advanced higher for the twenty-seventh time out of the past twenty-nine weeks. The current bullish standing is above the +40,000 net contract level for the first time since May of 2017.


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Individual Currencies Data this week: Euro and Peso bets fall sharply

In the other major currency contracts data, we saw two substantial changes (+ or – 10,000 contracts) in the speculators category this week.

Euro bets fell sharply this week by over -14,000 contracts and have gone lower for six consecutive weeks. The current standing for the euro is now at the most bearish level since March 7th of 2017 when the net position totaled -59,501 contracts.

The Mexican peso contracts continued to decline sharply by over -26,000 contracts this week. The peso bets have dropped lower for four straight weeks and by a total of -67,413 over that time period. Despite these recent shortfalls, the peso does still remain in a small bullish position (+7,036 contracts) but is now at the lowest bullish standing of the past eighteen weeks.

Overall, the major currencies that improved this week were the US Dollar Index (759 weekly change in contracts), Japanese yen (2,498 contracts), Canadian dollar (7,023 contracts), Australian dollar (3,967 contracts) and the New Zealand dollar (9,305 contracts).

The currencies whose speculative bets declined this week were the euro (-14,181 weekly change in contracts), British pound sterling (-4,317 contracts), Swiss franc (-5,426 contracts) and the Mexican peso (-26,773 contracts).

Other Notables for the week:

Canadian dollar positions improved this week by 7,023 contracts and have now seen improvements for six out of the past seven weeks. The current speculative standing is now at the lowest bearish level since March 20th of 2017. The CAD position remains in a very small bearish standing (-2,632 contracts) and could cross over into bullish territory soon.

The New Zealand dollar position rebounded this week with one of the best weeks in a long time. NZD net positions rose by 9,305 contracts this week which was the most in 33 weeks and brought the overall bearish standing under the -30,000 contract level for the first time since the beginning of September.

See the table and individual currency charts below.


Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx 21,552 6,947 -46,843 -14,181
GBP 69,869 -2,301 -56,799 -4,317
JPY 113,442 5,980 -89,122 2,498
CHF 40,694 5,842 -19,948 -5,426
CAD 921 -7,551 -2,632 7,023
AUD 83,824 -9,578 -66,445 3,967
NZD 29,252 -9,846 -25,726 9,305
MXN -8,641 26,777 7,036 -26,773

 

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