US Dollar Speculators cut back on their bearish bets for 2nd week, Euro bets drop sharply


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US Dollar Index Speculator Positions

Large currency speculators trimmed 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 -3,034 contracts in the data reported through Tuesday October 6th. This was a weekly gain of 2,521 contracts from the previous week which had a total of -5,555 net contracts.

This week’s net position was the result of the gross bullish position (longs) gaining by 3,669 contracts (to a weekly total of 18,509 contracts) compared to the gross bearish position (shorts) which saw a lesser advance of 1,148 contracts on the week (to a total of 21,543 contracts).

The US Dollar Index speculators decreased their bearish bets for a second straight week this week and by a total of +6,112 contracts over this two-week period. This improvement over the past two weeks brings the overall position to the least bearish level since June 9th when the net position was in bullish territory at +4,689 contracts. The dollar speculator standing has now continued to remain in bearish territory for a total of seventeen straight weeks.


Individual Currencies Data this week: Euro bets drop sharply

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

Euro positions dropped sharply this week by over -13,000 contracts. The euro bets have fallen for two straight weeks and for three out of the previous four weeks as well. The euro bullish position has been historically strong in the past four-to-six months and rode a surge of bullish bets to a record high level of +211,752 contracts on August 25th. Since then, the euro speculator position has cooled off but remains extremely bullish at a net level over +174,000 contracts.

Overall, the major currencies that saw improving speculator positions this week were the US dollar index (2,521 weekly change in contracts), British pound sterling (1,447 contracts), Swiss franc (355 contracts), Canadian dollar (901 contracts), Australian dollar (1,910 contracts), New Zealand dollar (1,761 contracts) and the Mexican peso (8,706 contracts).

The currencies whose speculative bets declined this week were the euro (-13,808 weekly change in contracts) and the Japanese yen (-3,687 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:

CurrencyNet Speculator PositionSpecs Weekly Change
USD Index-3,0342,521
EuroFx174,308-13,808
GBP-11,2981,447
JPY21,102-3,687
CHF13,096355
CAD-18,047901
AUD10,8471,910
NZD5,0901,761
MXN21,3428,706

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 came in at a net position of 174,308 contracts in the data reported through Tuesday. This was a weekly decrease of -13,808 contracts from the previous week which had a total of 188,116 net contracts.


British Pound Sterling:

The large British pound sterling speculator level resulted in a net position of -11,298 contracts in the data reported this week. This was a weekly lift of 1,447 contracts from the previous week which had a total of -12,745 net contracts.


Japanese Yen:

Large Japanese yen speculators resulted in a net position of 21,102 contracts in this week’s data. This was a weekly reduction of -3,687 contracts from the previous week which had a total of 24,789 net contracts.


Swiss Franc:

The Swiss franc speculator standing this week came in at a net position of 13,096 contracts in the data through Tuesday. This was a weekly lift of 355 contracts from the previous week which had a total of 12,741 net contracts.


Canadian Dollar:

Canadian dollar speculators was a net position of -18,047 contracts this week. This was a rise of 901 contracts from the previous week which had a total of -18,948 net contracts.


Australian Dollar:

The large speculator positions in Australian dollar futures reached a net position of 10,847 contracts this week in the data ending Tuesday. This was a weekly gain of 1,910 contracts from the previous week which had a total of 8,937 net contracts.


New Zealand Dollar:

The New Zealand dollar speculative standing reached a net position of 5,090 contracts this week in the latest COT data. This was a weekly lift of 1,761 contracts from the previous week which had a total of 3,329 net contracts.


Mexican Peso:

Mexican peso speculators came in at a net position of 21,342 contracts this week. This was a weekly rise of 8,706 contracts from the previous week which had a total of 12,636 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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