Currency Speculators Pull Back Bullish Dollar Bets

By CountingPips.com

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 forex speculators slightly pulled back on their overall US Dollar bullish bets last week for a second straight week.

Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar long position totaling $31.42 billion as of Tuesday September 16th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly change of just -$0.21 billion from the $31.63 billion total long position that was registered on September 9th, according to the Reuters calculation that totals 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 US dollar position remains strongly bullish with the US dollar position trading over +$30 billion for five straight weeks. The US dollar index, meanwhile, continued to trade over the 84.00 threshold for a second week.

Overall Speculative Net Contracts

In terms of total speculative contracts, overall US dollar contracts advanced last week to +185,458 contracts as of Tuesday September 16th. This was a change by +41,081 contracts from the total of +144,377 contracts as of Tuesday September 9th. This total US dollar contracts calculation takes into account more currencies than the Reuters dollar amount total and is derived by adding the sum of each individual currencies net position versus the dollar. Currency contracts used in the calculation are the euro, British pound, Japanese yen, Swiss franc, Canadian dollar, Australian dollar, New Zealand dollar and the Mexican peso.

 Major Currency Weekly Levels & Changes:

Overall changes on the week for the major currencies showed that large speculators raised their bets last week in favor of the euro, Japanese yen and the Swiss franc while decreasing weekly bets for the British pound sterling, Canadian dollar, Australian dollar, New Zealand dollar and the Mexican peso.

Notable changes on the week for the Major Currencies:

• Euro positions advanced rather sharply last week (+20,356) and gained for a 2nd week. The euro spec position remains very bearish while the EUR/USD exchange rate is now trading under the 1.2850 level

• British pound sterling positions fell over to the bearish side last week for the first time since November 2013 as the data is from before the Scottish independence vote on Sept 18th. Now that the vote for independence was unsuccessful, there could be a bullish surge in the GBP bets

• Japanese yen bets gained last week (+17,491) for a second week. Yen bets came back to their best level since August 12th although remain in very bearish territory

• Swiss franc bets gained last week after two weeks of decreases. Franc positions have been on the bearish side for thirteen straight weeks

• Canadian dollar positions decreased last week after two weeks of gains. The  USD/CAD exchange rate remains at a major crossroads near the 1.1000 major level

• Australian dollar net positions fell sharply (-19,089) last week and dropped to the lowest level since June. The AUD/USD pair also fell strongly last week to close the week just below the 0.9000 major level

• New Zealand dollar net positions declined for a seventh straight week as positions fell to the lowest level in a year

• Mexican peso positions fell last week for a second straight week as peso spec positions dropped below +30,000 contracts for the first time in four weeks

This latest COT data is through Tuesday September 16th and shows a quick view of how large speculators and for-profit traders (non-commercials) 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.

Please see the individual currency charts and their respective data points below.

Weekly Charts: Large Speculators Weekly Positions vs Currency Spot Price

EuroFX:

Last Six Weeks data for EuroFX futures

British Pound Sterling:

Last Six Weeks data for Pound Sterling futures

Japanese Yen:

Last Six Weeks data for Yen Futures

Swiss Franc:

Last Six Weeks data for Franc futures

Canadian Dollar:

Last Six Weeks data for Canadian dollar futures

Australian Dollar:

Last Six Weeks data for Australian dollar futures

New Zealand Dollar:

Last Six Weeks data for New Zealand dollar futures

Mexican Peso:

Last Six Weeks data for Mexican Peso futures

Disclaimer: 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).

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 graphs overlay the forex spot 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.