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USD Speculators Dropped Bets Back Into Bearish Position

By Zachary StorellaForexOct 25, 2020 01:28AM ET
www.investing.com/analysis/large-us-dollar-index-speculators-dropped-their-bets-back-into-bearish-position-200542242
USD Speculators Dropped Bets Back Into Bearish Position
By Zachary Storella   |  Oct 25, 2020 01:28AM ET
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US Dollar Index Speculator Positions

Large currency speculators decreased their 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.

USD Index COT Futures Large Trader Positions
USD Index COT Futures Large Trader Positions

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of -1,666 contracts in the data reported through Tuesday October 20th. This was a weekly decrease of -2,103 contracts from the previous week which had a total of 437 net contracts.

This week’s net position was the result of the gross bullish position (longs) sliding by -2,042 contracts (to a weekly total of 18,068 contracts) and combined with the gross bearish position (shorts) which saw a rise by 61 contracts on the week (to a total of 19,734 contracts).

The US Dollar Index speculators reversed their bets this week and dropped their overall net positions back into a bearish standing. This week’s decline follows gains in the previous three weeks that had boosted the speculative position into bullish territory for the first time in the prior 18 weeks. The US Dollar Index price (DXY) also lost its momentum this week after a strong finish last week and closed the week below the 93.00 threshold, touching its lowest level since August along the way.

Individual Currencies Data this week:

In the individual contracts data, the currencies that saw improving speculator positions this week were the British pound sterling (7,802 weekly change in contracts)), Australian dollar (2,901 contracts), New Zealand dollar (112 contracts) and the Swiss franc (2,227 contracts).

The currencies whose speculative bets declined this week were the US dollar index (-2,103 weekly change in contracts), euro (-2,694 contracts), Japanese yen (-5,793 contracts), Canadian dollar (-5,511 contracts) and the Mexican peso (-2,636 contracts).

Chart: Current Strength of Each Currency compared to their 3-Year Range

Current Strength Of Each Currency
Current Strength Of Each Currency

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:

Table Of Large Speculator Levels & Weekly Changes
Table Of Large Speculator Levels & Weekly Changes

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:

Euro COT Futures Large Trader Positions
Euro COT Futures Large Trader Positions

The Euro large speculator standing this week was a net position of 165,943 contracts in the data reported through Tuesday. This was a weekly decline of -2,694 contracts from the previous week which had a total of 168,637 net contracts.

British Pound Sterling:

GBP COT Futures Large Trader Positions
GBP COT Futures Large Trader Positions

The large British pound sterling speculator level resulted in a net position of -2,000 contracts in the data reported this week. This was a weekly boost of 7,802 contracts from the previous week which had a total of -9,802 net contracts.

Japanese Yen:

JPY COT Futures Large Trader Positions
JPY COT Futures Large Trader Positions

Large Japanese yen speculators recorded a net position of 14,183 contracts in this week’s data. This was a weekly decrease of -5,793 contracts from the previous week which had a total of 19,976 net contracts.

Swiss Franc:

CHF COT Futures Large Trader Positions
CHF COT Futures Large Trader Positions

The Swiss franc speculator standing this week resulted in a net position of 14,399 contracts in the data through Tuesday. This was a weekly increase of 2,227 contracts from the previous week which had a total of 12,172 net contracts.

Canadian Dollar:

CAD COT Futures Large Trader Positions
CAD COT Futures Large Trader Positions

Canadian dollar speculators equaled a net position of -19,075 contracts this week. This was a reduction of -5,511 contracts from the previous week which had a total of -13,564 net contracts.

Australian Dollar:

AUD COT Futures Large Trader Positions
AUD COT Futures Large Trader Positions

The large speculator positions in Australian dollar futures totaled a net position of 6,755 contracts this week in the data ending Tuesday. This was a weekly rise of 2,901 contracts from the previous week which had a total of 3,854 net contracts.

New Zealand Dollar:

NZD COT Futures Large Trader Positions
NZD COT Futures Large Trader Positions

The New Zealand dollar speculative standing reached a net position of 6,602 contracts this week in the latest COT data. This was a weekly increase of 112 contracts from the previous week which had a total of 6,490 net contracts.

Mexican Peso:

MXN COT Futures Large Trader Positions
MXN COT Futures Large Trader Positions

Mexican peso speculators was a net position of 19,842 contracts this week. This was a weekly decline of -2,636 contracts from the previous week which had a total of 22,478 net contracts.

USD Speculators Dropped Bets Back Into Bearish Position
 

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USD Speculators Dropped Bets Back Into Bearish Position

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