US Dollar Index Speculators raised bearish bets for 2nd week. Euro bullish bets rebound


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US Dollar Index Speculator Positions

Large currency speculators increased 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 -9,146 contracts in the data reported through Tuesday September 22nd. This was a weekly lowering of -906 contracts from the previous week which had a total of -8,240 net contracts.

The week’s net position was the result of the gross bullish position (longs) tumbling by -1,424 contracts (to a weekly total of 11,932 contracts) compared to the gross bearish position (shorts) which saw a smaller fall by -518 contracts on the week (to a total of 21,078 contracts).

The US Dollar Index net bearish positions rose this week for the second consecutive week. This weak sentiment has pushed the current speculator standing to the most bearish level since turning bearish in June as well as the most bearish level dating all the way back to November 28th of 2017, a span of 147 weeks. Despite the sentiment weakness, the US Dollar Index price jumped this week with a rise from approximately 93.02 to end the week above 94.50.


Individual Currencies Data this week: Euro bullish bets bounce back

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

Euro speculator positions rebounded this week after a sharp fall over the previous three weeks. Euro speculator positions have been on a spectacular run in recent months as bullish bets have risen in 23 out of the past 30 weeks and by a total of +304,843 contracts in that time-frame. This positive sentiment led to a record high bullish standing on August 25th at a total of +211,752 contracts and this week’s bullish position (+190,822 contracts) is not too far off that record high. The EURUSD currency pair, meanwhile, had been on the rise in tandem with spec bullish bets but fell sharply this week and dropped by over 200 pips to close the week just below the 1.1650 exchange rate.

Overall, the major currencies that saw improving speculator positions this week were the  euro (12,246 weekly change in contracts), British pound sterling (671 contracts), Japanese yen (6,692 contracts), Swiss franc (3,850 contracts), Australian dollar (120 contracts), New Zealand dollar (1,618 contracts) and the Mexican peso (179 contracts).

The currencies whose speculative bets declined this week were the US dollar index (-906 weekly change in contracts) and the Canadian dollar (-1,939 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 -9,146 -906
EuroFx 190,822 12,246
GBP 2,964 671
JPY 29,581 6,692
CHF 15,916 3,850
CAD -18,882 -1,939
AUD 16,339 120
NZD 4,860 1,618
MXN 26,650 179

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 190,822 contracts in the data reported through Tuesday. This was a weekly lift of 12,246 contracts from the previous week which had a total of 178,576 net contracts.


British Pound Sterling:

The large British pound sterling speculator level was a net position of 2,964 contracts in the data reported this week. This was a weekly increase of 671 contracts from the previous week which had a total of 2,293 net contracts.


Japanese Yen:

Large Japanese yen speculators came in at a net position of 29,581 contracts in this week’s data. This was a weekly advance of 6,692 contracts from the previous week which had a total of 22,889 net contracts.


Swiss Franc:

The Swiss franc speculator standing this week reached a net position of 15,916 contracts in the data through Tuesday. This was a weekly rise of 3,850 contracts from the previous week which had a total of 12,066 net contracts.


Canadian Dollar:

Canadian dollar speculators reached a net position of -18,882 contracts this week. This was a decrease of -1,939 contracts from the previous week which had a total of -16,943 net contracts.


Australian Dollar:

The large speculator positions in Australian dollar futures came in at a net position of 16,339 contracts this week in the data ending Tuesday. This was a weekly gain of 120 contracts from the previous week which had a total of 16,219 net contracts.


New Zealand Dollar:

The New Zealand dollar speculative standing totaled a net position of 4,860 contracts this week in the latest COT data. This was a weekly rise of 1,618 contracts from the previous week which had a total of 3,242 net contracts.


Mexican Peso:

Mexican peso speculators totaled a net position of 26,650 contracts this week. This was a weekly gain of 179 contracts from the previous week which had a total of 26,471 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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