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Speculators cut US Dollar bullish bets to lowest since September

 

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US Dollar net speculator positions fell to $8.32 billion last week

The latest data for the weekly Commitment of Traders (COT) report, released by the Commodity Futures Trading Commission (CFTC) on Friday, showed that large traders and currency speculators sharply reduced their combined bullish bets for the US dollar last week to the lowest level in over eight months.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar long position totaling $8.32 billion as of Tuesday May 23rd, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly decline of $-5.18 billion from the $13.50 billion total long position that was registered the previous week, according to the Reuters calculation (totals of the US dollar contracts against the combined contracts of the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc).

The aggregate speculative dollar positions are now at the lowest level since September 6th 2016 when net positions totaled $6.56 billion while the weekly decline marked the largest one week fall since December 20th ($-5.56 billion). Dollar bets have now fallen four out of the past five weeks.

Weekly Speculator Contract Changes: Euro jumps by +27,241 bets

The individual major currency contracts saw less sharp movements this week compared to the previous two weeks with just two major currencies seeing weekly changes above the 10,000 contract mark.

The euro speculator bids continued to rise for a fifth straight week and push euro positions to the best net bullish position since October 29th 2013 when net positions totaled +70,617 contracts. The euro bets have advanced by +86,494 contracts over the past five weeks.

The Mexican peso, meanwhile, dropped by -15,756 contracts last week following two weeks of gains. Peso positions turned from net bearish to net bullish on April 18th and currently stand at over +50,000 net contracts.

Overall, the major currencies that improved against the US dollar last week were the euro (27,241 weekly change in contracts), British pound sterling (9,128 contracts), Japanese yen (8,352 contracts), Swiss franc (1,377 contracts) and the New Zealand dollar (1,184 contracts).

The currencies whose speculative bets declined last week versus the dollar were the Canadian dollar (-1,109 weekly change in contracts), Australian dollar (-3,709 contracts) and the Mexican peso (-15,756 contracts).

 

Table of Weekly Commercial Traders and Speculators Levels & Changes:

Currency Net Commercials Comms Weekly Chg Net Speculators Specs Weekly Chg
EuroFx -81570 -31619 64845 27241
GBP 22479 -9526 -23867 9128
JPY 68837 -13521 -51656 8352
CHF 19808 -10501 -19785 1377
CAD 112104 3420 -99109 -1109
AUD 8515 -471 2635 -3709
NZD 13108 -1119 -10786 1184
MXN -59205 16215 54298 -15756

 

This latest COT data is through Tuesday and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) 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:

 

British Pound Sterling:

 

Japanese Yen:

 

Swiss Franc:

 

Canadian Dollar:

 

Australian Dollar:

 

New Zealand Dollar:

 

Mexican Peso:

*COT Report: The weekly commitment of traders report summarizes the total trader positions for open contracts in the futures trading 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).

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The charts overlay the forex closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.) See more information and explanation on the weekly COT report from the CFTC website.

Article by CountingPips.com

 

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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