Speculators Edged USD Bearish Bets Lower While Euro Bets Dropped Last Week
Zachary Storella | Jul 07, 2020 12:16AM ET
Large currency speculators slightly reduced their bearish net positions in the US Dollar Index futures markets last week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Monday due to the July 4th holiday.
The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of -4,975 contracts in the data reported through Tuesday June 30th. This was a weekly change of 339 contracts from the previous week which had a total of -5,314 net contracts.
Last week’s net position was the result of the gross bullish position (longs) tumbling by -1,841 contracts (to a weekly total of 9,812 contracts) compared to the gross bearish position (shorts) which saw a reduction by -2,180 contracts on the week (to a total of 14,787 contracts).
The US Dollar Index speculators slightly cut back on their bearish bets for a second straight week last week. Previously, speculator sentiment had declined for four straight weeks from May 26th to June 16th as positions dropped by a total of -22,641 contracts over that time-frame. That sharp drop in sentiment pushed the dollar standing into bearish territory for the first time in 110 weeks, dating back to May of 2018. Currently, the dollar position remains in a small bearish level for a third straight week at just under -5,000 contracts.
h3 Individual Currencies Data This Week: euro bets dropped by almost -20K/h3
In the other major currency contracts data, we saw just one substantial change (+ or – 10,000 contracts) in the speculators category last week.
Euro speculator positions dropped sharply last week by almost -20,000 contracts. The euro position had previously risen for five straight weeks and by a total of +45,886 contracts in that period before last week’s setback. The sentiment for the euro has surged since March as speculator positions went from a total of -12,667 contracts on March 10th to a total of +98,955 contracts as of last Tuesday. The EURUSD exchange rate has not fared quite as well but has recently seen better levels with the EURUSD trading as high as the 1.1400 level in June and residing above 1.13 to start this week.
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Overall, the major currencies that saw improving speculator positions last week were the US Dollar Index (339 weekly change in contracts), Swiss franc (2,890 contracts), Canadian dollar (315 contracts), Australian dollar (1,902 contracts) and the New Zealand dollar (371 contracts).
The currencies whose speculative bets declined last week were the euro (-19,493 weekly change in contracts), British pound sterling (-2,474 contracts), Japanese yen (-3,597 contracts) and the Mexican peso (-2,222 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 And Weekly Changes: Through June 30th/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 last week recorded a net position of 98,955 contracts in the data reported through Tuesday. This was a weekly reduction of -19,493 contracts from the previous week which had a total of 118,448 net contracts.
British Pound Sterling:
The large British pound sterling speculator level equaled a net position of -20,990 contracts in the data reported last week. This was a weekly lowering of -2,474 contracts from the previous week which had a total of -18,516 net contracts.
Japanese Yen:
Large Japanese yen speculators came in at a net position of 23,861 contracts in last week’s data. This was a weekly decline of -3,597 contracts from the previous week which had a total of 27,458 net contracts.
Swiss Franc:
The Swiss franc speculator standing last week equaled a net position of 4,338 contracts in the data through Tuesday. This was a weekly gain of 2,890 contracts from the previous week which had a total of 1,448 net contracts.
Canadian Dollar:
Canadian dollar speculators totaled a net position of -20,519 contracts last week. This was a lift of 315 contracts from the previous week which had a total of -20,834 net contracts.
Australian Dollar:
The large speculator positions in Australian dollar futures resulted in a net position of -2,908 contracts last week in the data ending Tuesday. This was a weekly boost of 1,902 contracts from the previous week which had a total of -4,810 net contracts.
New Zealand Dollar:
The New Zealand dollar speculative standing recorded a net position of 356 contracts last week in the latest COT data. This was a weekly boost of 371 contracts from the previous week which had a total of -15 net contracts.
Mexican Peso:
Mexican peso speculators recorded a net position of 20,956 contracts last week. This was a weekly reduction of -2,222 contracts from the previous week which had a total of 23,178 net contracts.
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