US Dollar Speculators pushed their bets into a new bullish position

October 17, 2020

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US Dollar Index Speculator Positions

Large currency speculators continued to raise their net positions in the US Dollar Index futures markets 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 437 contracts in the data reported through Tuesday October 13th. This was a weekly gain of 3,471 contracts from the previous week which had a total of -3,034 net contracts.


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This week’s net position was the result of the gross bullish position (longs) rising by 1,601 contracts (to a weekly total of 20,110 contracts) combined with the gross bearish position (shorts) which fell by -1,870 contracts on the week (to a total of 19,673 contracts).

The US Dollar Index speculators boosted their net positions higher this week for the third consecutive week. The dollar bets have now gained by a total of +9,583 contracts over these past three weeks and climbed into a net bullish position for the first time in eighteen weeks, dating back to June 9th. The dollar index price (DXY) has also been improving over the past six weeks (to above the 93 level) after hitting an approximate 3-month low in August at just above the 91.50 exchange rate.


Individual Currencies Data this week:

In the individual major currency contracts data, the major currencies that saw improving speculator positions on the week were the US dollar index (3,471 weekly change in contracts), British pound sterling (1,496 contracts), Canadian dollar (4,483 contracts), New Zealand dollar (1,400 contracts) and the Mexican peso (1,136 contracts).

The currencies whose speculative bets declined this week were the euro (-5,671 weekly change in contracts), Japanese yen (-1,126 contracts), Swiss franc (-924 contracts) and the Australian dollar (-6,993 contracts).

 


Chart: Current Strength of Each Currency compared to their 3-Year Range

The above chart depicts each currency’s current speculator strength level compared to data of the past 3 years. A score of 0 percent would mean speculator bets are currently at the lowest level of the past three years. A 100 percent score would be at the highest level while a 50 percent score would mean speculator bets are right in the middle of the data (a neutral score). We use above 80 percent (extreme bullish) and below 20 percent (extreme bearish) as extreme score measurements.

Please see the data table and individual currency charts below.


 

Table of Large Speculator Levels & Weekly Changes:

Currency Net Speculator Position Specs Weekly Change
USD Index 437 3,471
EuroFx 168,637 -5,671
GBP -9,802 1,496
JPY 19,976 -1,126
CHF 12,172 -924
CAD -13,564 4,483
AUD 3,854 -6,993
NZD 6,490 1,400
MXN 22,478 1,136

 

This latest COT data is through Tuesday and shows a quick view of how large speculators or non-commercials (for-profit traders) 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:

 

The Euro large speculator standing this week totaled a net position of 168,637 contracts in the data reported through Tuesday. This was a weekly reduction of -5,671 contracts from the previous week which had a total of 174,308 net contracts.

 


British Pound Sterling:

 

The large British pound sterling speculator level recorded a net position of -9,802 contracts in the data reported this week. This was a weekly lift of 1,496 contracts from the previous week which had a total of -11,298 net contracts.

 


Japanese Yen:

 

Large Japanese yen speculators was a net position of 19,976 contracts in this week’s data. This was a weekly reduction of -1,126 contracts from the previous week which had a total of 21,102 net contracts.

 


Swiss Franc:

 

The Swiss franc speculator standing this week totaled a net position of 12,172 contracts in the data through Tuesday. This was a weekly lowering of -924 contracts from the previous week which had a total of 13,096 net contracts.

 


Canadian Dollar:

 

Canadian dollar speculators came in at a net position of -13,564 contracts this week. This was a advance of 4,483 contracts from the previous week which had a total of -18,047 net contracts.

 


Australian Dollar:

 

The large speculator positions in Australian dollar futures came in at a net position of 3,854 contracts this week in the data ending Tuesday. This was a weekly reduction of -6,993 contracts from the previous week which had a total of 10,847 net contracts.

 


New Zealand Dollar:

 

The New Zealand dollar speculative standing equaled a net position of 6,490 contracts this week in the latest COT data. This was a weekly gain of 1,400 contracts from the previous week which had a total of 5,090 net contracts.

 


Mexican Peso:

 

Mexican peso speculators totaled a net position of 22,478 contracts this week. This was a weekly lift of 1,136 contracts from the previous week which had a total of 21,342 net contracts.

 


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*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures 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).