Forex Speculators edge US Dollar Index bets higher. Yen & Euro bullish bets rise


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US Dollar Index Speculator Positions

Large currency speculators ever so slightly edged their bullish net positions higher 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 16,450 contracts in the data reported through Tuesday May 12th. This was a weekly inch up of 25 contracts from the previous week which had a total of 16,425 net contracts.

This week’s net position was the result of the gross bullish position (longs) declining by -757 contracts (to a weekly total of 23,956 contracts) compared to the gross bearish position (shorts) which saw a larger decrease by -782 contracts on the week (to a total of 7,506 contracts).

US Dollar Index speculative bets barely moved this week but edged higher for the eighth consecutive week. The gains over the past eight weeks have been relatively modest but the current bullish standing (+16,450 contracts) has now risen above the 2020 weekly average of +16,032 contracts. The current level is now at the most bullish point in the past ten weeks, dating back to March 3rd.


Individual Currencies Data this week: Mexican Peso bets drop into bearish territory for 1st time in 98 weeks

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

Mexican peso positions dropped for a second straight week and for the fourteenth time in the past fifteen weeks. This week’s decline pushed the overall net speculator position (-5,120 contracts) into bearish or short territory for the first time since June 26th of 2018, a span of 98 weeks. The fall of the peso position has been remarkably swift considering the all-time record high bullish position was reached on January 28th or just about fifteen weeks ago at a total of +170,366 contracts.

Euro speculators raised their bullish bets this week following two weeks of falling bets. This week’s gain marks the ninth time in the past eleven weeks that positions have risen. Despite this recent strength in bullish bets, the euro currency has not fared as well as the EURUSD has remained on the defensive and trading under the 1.10 exchange rate for a seventh straight weekly close.

Japanese yen speculative positions increased their bullish bets this week after a down week last week and for the fifth time in the past six weeks. Yen positions turned bullish on March 10th and have been in bullish territory for a total of 10 straight weeks.

Overall, the major currencies that saw improving speculator positions this week were the US dollar index (25 weekly change in contracts), euro (1,841 contracts) and the Japanese yen (723 contracts).

The currencies whose speculative bets declined this week were the British pound sterling (-1,683 weekly change in contracts), Swiss franc (-1,143 contracts), Canadian dollar (-194 contracts), Australian dollar (-1,970 contracts), New Zealand dollar (-925 contracts) and the Mexican peso (-12,229 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 16,450 25
EuroFx 78,140 1,841
GBP -13,688 -1,683
JPY 27,937 723
CHF 6,648 -1,143
CAD -32,246 -194
AUD -35,425 -1,970
NZD -15,878 -925
MXN -5,120 -12,229

 

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 recorded a net position of 78,140 contracts in the data reported through Tuesday. This was a weekly lift of 1,841 contracts from the previous week which had a total of 76,299 net contracts.


British Pound Sterling:

The large British pound sterling speculator level came in at a net position of -13,688 contracts in the data reported this week. This was a weekly decline of -1,683 contracts from the previous week which had a total of -12,005 net contracts.


Japanese Yen:

Large Japanese yen speculators equaled a net position of 27,937 contracts in this week’s data. This was a weekly advance of 723 contracts from the previous week which had a total of 27,214 net contracts.


Swiss Franc:

The Swiss franc speculator standing this week recorded a net position of 6,648 contracts in the data through Tuesday. This was a weekly decline of -1,143 contracts from the previous week which had a total of 7,791 net contracts.


Canadian Dollar:

Canadian dollar speculators resulted in a net position of -32,246 contracts this week. This was a decline of -194 contracts from the previous week which had a total of -32,052 net contracts.


Australian Dollar:

The large speculator positions in Australian dollar futures totaled a net position of -35,425 contracts this week in the data ending Tuesday. This was a weekly fall of -1,970 contracts from the previous week which had a total of -33,455 net contracts.


New Zealand Dollar:

The New Zealand dollar speculative standing totaled a net position of -15,878 contracts this week in the latest COT data. This was a weekly lowering of -925 contracts from the previous week which had a total of -14,953 net contracts.


Mexican Peso:

Mexican peso speculators recorded a net position of -5,120 contracts this week. This was a weekly lowering of -12,229 contracts from the previous week which had a total of 7,109 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).

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