Speculators raise US Dollar Index, Japanese Yen bets. Euro, AUD and CAD bets fall


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US Dollar Index Speculator Positions

Large currency speculators lifted their bullish 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 17,133 contracts in the data reported through Tuesday February 4th. This was a weekly increase of 700 contracts from the previous week which had a total of 16,433 net contracts.

This week’s net position was the result of the gross bullish position (longs) increasing by 1,648 contracts (to a weekly total of 29,964 contracts) compared to the gross bearish position (shorts) which saw a lesser gain by 948 contracts on the week (to a total of 12,831 contracts).

US Dollar Index speculators raised their bullish bets for a second straight week and for the fourth time in the past five weeks. This uptick in bullishness follows a long down-streak that had seen bullish bets fall for twelve out of the previous thirteen weeks through December 31st. This week’s gain pushed the current USD Index level to the highest point in the past eight weeks at a total over +17,000 net contracts.


Individual Currencies Data this week:

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

Euro speculator positions dropped sharply by over -10,000 contracts for the second consecutive week this week. The total decline of the past two weeks is a total of -28,061 contracts and has now pushed the current speculator level (at -75,080 contracts) to the most bearish position since October 15th. Overall, euro speculator positions have now been in bearish territory for seventy-one straight weeks.

Australian dollar positions fell strongly this week by over -15,000 net contracts. The Aussie bets have now declined for two straight weeks. Previously, AUD positions had five straight weeks of improvement that had brought the spec positioning to its best level in eighty-four weeks. Unfortunately for the AUD bulls, the last two weeks have pushed bearish bets back to the highest level in six weeks.

Canadian dollar speculator positions dropped sharply this week by over -16,000 contracts and declined for the second straight week. Despite these recent shortfalls, CAD positions have been in bullish territory for the past thirty-two weeks (dating back to July 2nd) and had reached a ten-week high on January 21st at a total of +38,294 contracts.

Japanese yen speculator bets jumped this week by over +14,000 contracts and have now gained by +22,803 contracts in the past two weeks. Yen positions are usually the beneficiary of risk off situations in the global economy and could benefit further if concerns over the coronavirus outbreak continue to accelerate. Overall, the yen speculator positions do remain in bearish territory at a total of -21,898 contracts and have been in a bearish standing for the past seventeen weeks.

In total, the major currencies that saw improving speculator positions this week were the US dollar index (700 weekly change in contracts), Japanese yen (14,127 contracts) and the Swiss franc (1,422 contracts).

The currencies whose speculative bets declined this week were the euro (-16,218 weekly change in contracts), British pound sterling (-4,702 contracts), Canadian dollar (-16,027 contracts), Australian dollar (-15,777 contracts), New Zealand dollar (-4,252 contracts) and the Mexican peso (-5,194 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 17,133 700
EuroFx -75,080 -16,218
GBP 12,987 -4,702
JPY -21,898 14,127
CHF 4,919 1,422
CAD 18,563 -16,027
AUD -43,297 -15,777
NZD -2,192 -4,252
MXN 165,172 -5,194

 

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 reached a net position of -75,080 contracts in the data reported through Tuesday. This was a weekly decrease of -16,218 contracts from the previous week which had a total of -58,862 net contracts.


British Pound Sterling:

The large British pound sterling speculator level came in at a net position of 12,987 contracts in the data reported this week. This was a weekly fall of -4,702 contracts from the previous week which had a total of 17,689 net contracts.


Japanese Yen:

Large Japanese yen speculators totaled a net position of -21,898 contracts in this week’s data. This was a weekly lift of 14,127 contracts from the previous week which had a total of -36,025 net contracts.


Swiss Franc:

The Swiss franc speculator standing this week resulted in a net position of 4,919 contracts in the data through Tuesday. This was a weekly advance of 1,422 contracts from the previous week which had a total of 3,497 net contracts.


Canadian Dollar:

Canadian dollar speculators equaled a net position of 18,563 contracts this week. This was a reduction of -16,027 contracts from the previous week which had a total of 34,590 net contracts.


Australian Dollar:

The large speculator positions in Australian dollar futures recorded a net position of -43,297 contracts this week in the data ending Tuesday. This was a weekly lowering of -15,777 contracts from the previous week which had a total of -27,520 net contracts.


New Zealand Dollar:

The New Zealand dollar speculative standing totaled a net position of -2,192 contracts this week in the latest COT data. This was a weekly lowering of -4,252 contracts from the previous week which had a total of 2,060 net contracts.


Mexican Peso:

Mexican peso speculators reached a net position of 165,172 contracts this week. This was a weekly reduction of -5,194 contracts from the previous week which had a total of 170,366 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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