COT Currencies: Euro Speculator’s Bullish Bets Surge To New Record High
Zachary Storella | Aug 09, 2020 01:01AM ET
Large currency speculators edged their bearish net positions lower in the US Dollar Index futures markets this week, according to the latest 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 -6,475 contracts in the data reported through Tuesday August 4th. This was a weekly change of 252 contracts from the previous week which had a total of -6,727 net contracts.
This week’s net position was the result of the gross bullish position (longs) sliding by -2,433 contracts (to a weekly total of 20,402 contracts) compared to the gross bearish position (shorts) which saw a greater decrease by -2,685 contracts on the week (to a total of 26,877 contracts).
Speculators edged their US Dollar Index bearish bets lower this week following three straight weeks of higher bearish positions. Speculative positions have now been in bearish territory for eight straight weeks after previously residing in bullish territory for one hundred and nine consecutive weeks, dating back to May of 2018. The current bearish position has now been above -5,000 net contracts for four straight weeks.
h3 Individual Currencies Data: Euro Speculator’s Bullish Bets Surge to New Record High/h3
In the other major currency contracts data, we saw three substantial changes (+ or – 10,000 contracts) in the speculators category led by the new record high bullish position in the Euro currency.
Euro speculators sharply boosted their bullish bets this week to a new record high for a second consecutive week. Bullish positions jumped by over +23,000 contracts this week to a total of +180,648 contracts following a rise over +32,000 contracts in the previous week. Overall, euro bets have now risen in ten out of the last eleven weeks and by a total of +108,086 contracts in just that period. The positive sentiment for the euro has pushed the EURUSD currency pair above the 1.1750 exchange rate.
British pound sterling positions rose by over +10,000 contracts this week after declining by approximately that amount last week. The GBP position remains in a modest bearish level at -14,727 contracts and has now been in bearish or short territory for sixteen consecutive weeks. The GBPUSD currency pair has actually been relatively strong over the past month on the back of a very weak US dollar as the “cable” exchange rate currently trades above the 1.30 level.
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Canadian dollar positions fell by more than -10,000 contracts this week and pushed the overall position to the most bearish level since June. Speculative positions had improved in five out of the previous six weeks before this week’s drop. Overall, the Canadian dollar position has now been in bearish territory for 22 straight weeks, dating back to March 10th.
Overall, the major currencies that saw improving speculator positions this week were the US dollar index (252 weekly change in contracts), euro (23,089 weekly change in contracts), British pound sterling (10,682 contracts), Japanese yen (2,922 contracts), Swiss franc (3,218 contracts) and the Australian dollar (3,964 contracts).
The currencies whose speculative bets declined this week were the Canadian dollar (-10,699 contracts), New Zealand dollar (-603 contracts) and the Mexican peso (-7,865 contracts).
h3 Chart: Current Strength of Each Currency compared to their 3-Year Range/h3The 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.
h3 Table of Large Speculator Levels & Weekly Changes:/h3h3 Weekly Charts: Large Trader Weekly Positions vs Price/h3This 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.
EuroFX:
The Euro large speculator standing this week equaled a net position of 180,648 contracts in the data reported through Tuesday. This was a weekly lift of 23,089 contracts from the previous week which had a total of 157,559 net contracts.
British Pound Sterling:
The large British pound sterling speculator level resulted in a net position of -14,727 contracts in the data reported this week. This was a weekly increase of 10,682 contracts from the previous week which had a total of -25,409 net contracts.
Japanese Yen:
Large Japanese yen speculators reached a net position of 31,429 contracts in this week’s data. This was a weekly rise of 2,922 contracts from the previous week which had a total of 28,507 net contracts.
Swiss Franc:
The Swiss franc speculator standing this week was a net position of 11,660 contracts in the data through Tuesday. This was a weekly rise of 3,218 contracts from the previous week which had a total of 8,442 net contracts.
Canadian Dollar:
Canadian dollar speculators totaled a net position of -23,195 contracts this week. This was a decline of -10,699 contracts from the previous week which had a total of -12,496 net contracts.
Australian Dollar:
The large speculator positions in Australian dollar futures totaled a net position of -1,048 contracts this week in the data ending Tuesday. This was a weekly advance of 3,964 contracts from the previous week which had a total of -5,012 net contracts.
New Zealand Dollar:
The New Zealand dollar speculative standing recorded a net position of -1,448 contracts this week in the latest COT data. This was a weekly decrease of -603 contracts from the previous week which had a total of -845 net contracts.
Mexican Peso:
Mexican peso speculators equaled a net position of 2,999 contracts this week. This was a weekly lowering of -7,865 contracts from the previous week which had a total of 10,864 net contracts.
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