Fx Speculators Boosted U.S. Dollar Bullish Bets To Highest Since August
Zachary Storella | Oct 02, 2016 04:08AM ET
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 boosted their bets of the US dollar for the first time in three weeks and after having declined for seven out of the previous eight weeks.
Non-commercial large futures traders, including hedge funds and large speculators, had an overall US dollar long position totaling +$9.70 billion as of Tuesday September 27th, according to the latest data from the CFTC and dollar amount calculations by Reuters. This was a weekly change of +$3.14 billion from the +$6.56 billion total long position that was registered on September 20th, 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).
Following last week’s gain, the US dollar speculative level is now currently at its highest level in six weeks (since August 16th) when the aggregate US dollar bullish position equaled +$9.81 billion.
Weekly Speculator Contract Changes:
Last week’s data showed the major currencies that improved the most against the US dollar, were the Japanese yen (+10,107 weekly change in contracts), euro (+8,995 contracts), Australian dollar (+8,160 contracts) Mexican peso (+3,469 contracts) and the New Zealand dollar (+1,123 contracts).
The currencies whose speculative bets declined last week versus the dollar, were the British pound sterling (-29,028 weekly change in contracts), Canadian dollar (-27,918 contracts) and the Swiss franc (-14,369 contracts).
Notable changes:
British pound speculative positions dropped sharply last week, after rising for the previous four straight weeks.
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Euro positions rebounded last week and have risen for two out of the last three weeks to be in the least bearish level of the last six weeks.
Yen positions gained strongly by +10,107 contracts to show a 3rd weekly increase.
Australian dollar positions rebounded after dropping for a four weeks in a row and saw its net bullish position improve to +15,008 net contracts.
New Zealand dollar positions slightly rose last week and cut into its net bearish standing to -6,793 net contracts
Swiss franc positions fell sharply last week and saw its net speculative level fall into a bearish position against the dollar at -5,956 contracts
This latest COT data is through Tuesday September 27th, 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.
Please see the individual currency charts and their respective data points below. (Click on Charts to Enlarge)
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.
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