The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large currency speculators decreased their overall US dollar long positions last week to a short position for the first time since September 2011. Speculators raised their bets in favor of the non-dollar currencies such as the Japanese yen and the Canadian dollar while short positions in the euro continued to decrease.
Non-commercial large futures traders, including hedge funds and large speculators, reduced their total US dollar positions to being short by $441.7 million on August 28th from a total long position of $4.57 billion on August 21st, according to the CFTC COT data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.
CAD: Canadian dollar positions rose higher for a fifth consecutive week and advanced to the best level since May 1st. Canadian dollar positions rose to a total of 60,936 net long contracts as of August 28th following a total of 50,867 net short contracts that were reported for August 21st. The Canadian currency positions are at the highest level since May 1st when long positions equaled 70,223 contracts.
The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. 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 graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)
AUD: The Australian dollar positions declined for the first time in six weeks last week after Aussie positions had risen to the highest level all year the previous week. Aussie speculative futures positions fell to a total net amount of 78,072 long contracts on August 28th after totaling 86,882 net long contracts as of August 21st.
NZD: New Zealand dollar speculator positions decreased following 11th straight weeks of rising kiwi bets. NZD contracts declined to a total of 14,229 net long contracts as of August 28th following a total of 16,372 net long contracts on August 21st. Before last weeks decline, the kiwi contracts were just below their highest level since March 5th when contracts equaled 16,788 long positions.
MXN: Mexican peso speculative contracts dipped last week after surging to the highest level all year the previous week. Peso positions decreased to a total of 94,626 net long speculative positions as of August 28th following a total of 97,981 long contracts that were reported for August 21st. Before last week’s fall, Peso positions were at their highest level since July 12, 2011 when long positions equaled 98,447 contracts.
EuroFX: Currency speculator sentiment for the euro improved for a second consecutive week and brought euro positions to their best level since April. Euro net short positions or bets against the currency decreased to 101,561 contracts on August 28th from the previous week’s total of 123,932 net short contracts on August 21st. Euro positions are at their best level since April 9th when short positions equaled 101,364 contracts.
GBP: British pound sterling positions fell last week after improving for two consecutive weeks. British pound sterling speculative positions totaled 1,968 net long contracts on August 28th following a total of 7,833 net long contracts on August 21st. The previous week’s position for the British currency was the best level since May 22nd when long positions equaled 11,340 contracts.
JPY: Japanese yen speculative contracts increased as of the August 28th data following a sharp decrease the previous week. Japanese yen positions totaled 21,556 net long contracts reported on August 28th following a total of 11,171 net long contracts on August 21st.
CHF: Swiss franc speculator positions improved for second straight week last week and brought CHF speculative positions to their best level since June 19th. Speculator positions for the Swiss currency futures registered a total of 11,461 net short contracts on August 28th following a total of 15,662 net short contracts as of August 21st.
COT Currency Data Summary as of August 28, 2012
Large Speculators Net Positions vs. the US Dollar