Speculators Boost Euro Bullish Bets to Record High, Raise US Dollar Bearish Bets


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US Dollar Index Speculator Positions

Large currency speculators added to their bearish 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 -6,727 contracts in the data reported through Tuesday July 28th. This was a weekly change of -934 contracts from the previous week which had a total of -5,793 net contracts.

This week’s net position was the result of the gross bullish position (longs) advancing by 3,856 contracts (to a weekly total of 22,835 contracts) but being overcome by the gross bearish position (shorts) which saw a lift by 4,790 contracts on the week (to a total of 29,562 contracts).

The US Dollar Index speculators increased their bearish bets for a third straight week this week. The dollar position has now seen higher bearish bets in seven out of the past ten weeks as well. This bearishness has brought the dollar speculator standing to the most bearish level in the past 138 weeks, dating back to December 5th of 2017.


Individual Currencies Data this week: Speculators Boost Euro Bullish Bets to Record High

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

Euro speculators sharply boosted their bullish bets this week to the highest level on record at over +157,000 net contracts. This record surpasses the previous high of +151,476 contract level on April 17th of 2018. Euro positions have now increased for four straight weeks and nine times out of the past ten weeks as well. Speculator bets have gained by an incredible +271,580 contracts in just the past 22 weeks, dating back to March 3rd. The EURUSD exchange rate jumped this week with a high above the 1.19 level before easing off to close the week just below the 1.18 mark.

British pound sterling positions dropped sharply this week by over -10,000 contracts. The GBP positions saw higher bearish bets for a second straight week this week and have now had higher bearish bets in sixteen out of the past twenty weeks. This bearish sentiment has landed the British currency in negative or short territory for the past 15 weeks in a row. The GBPUSD currency pair, despite the sputtering GBP sentiment, actually rose to the highest level since March due to the recent and strong US Dollar weakness.

Overall, the major currencies that saw improving speculator positions this week were the euro (32,512 weekly change in contracts), Japanese yen (9,200 contracts), Swiss franc (1,063 contracts), Canadian dollar (4,202 contracts) and the Mexican peso (1,016 contracts).

The currencies whose speculative bets declined this week were the US dollar index (-934 weekly change in contracts), British pound sterling (-10,329 contracts),  Australian dollar (-4,807 contracts) and the New Zealand dollar (-3,320 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 -6,727 -934
EuroFx 157,559 32,512
GBP -25,409 -10,329
JPY 28,507 9,200
CHF 8,442 1,063
CAD -12,496 4,202
AUD -5,012 -4,807
NZD -845 -3,320
MXN 10,864 1,016

 

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 equaled a net position of 157,559 contracts in the data reported through Tuesday. This was a weekly rise of 32,512 contracts from the previous week which had a total of 125,047 net contracts.


British Pound Sterling:

The large British pound sterling speculator level recorded a net position of -25,409 contracts in the data reported this week. This was a weekly reduction of -10,329 contracts from the previous week which had a total of -15,080 net contracts.


Japanese Yen:

Large Japanese yen speculators resulted in a net position of 28,507 contracts in this week’s data. This was a weekly gain of 9,200 contracts from the previous week which had a total of 19,307 net contracts.


Swiss Franc:

The Swiss franc speculator standing this week reached a net position of 8,442 contracts in the data through Tuesday. This was a weekly rise of 1,063 contracts from the previous week which had a total of 7,379 net contracts.


Canadian Dollar:

Canadian dollar speculators equaled a net position of -12,496 contracts this week. This was a advance of 4,202 contracts from the previous week which had a total of -16,698 net contracts.


Australian Dollar:

The large speculator positions in Australian dollar futures totaled a net position of -5,012 contracts this week in the data ending Tuesday. This was a weekly decline of -4,807 contracts from the previous week which had a total of -205 net contracts.


New Zealand Dollar:

The New Zealand dollar speculative standing came in at a net position of -845 contracts this week in the latest COT data. This was a weekly reduction of -3,320 contracts from the previous week which had a total of 2,475 net contracts.


Mexican Peso:

Mexican peso speculators equaled a net position of 10,864 contracts this week. This was a weekly rise of 1,016 contracts from the previous week which had a total of 9,848 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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