U.S. Dollar Bearish Bets Rise, AUD And NZD Speculators Turn Bullish
Zachary Storella | Jul 19, 2020 04:54AM ET
Large currency speculators edged their bearish net positions higher 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.
The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of -5,039 contracts in the data reported through Tuesday July 14th. This was a weekly change of -100 contracts from the previous week which had a total of -4,939 net contracts.
This week’s net position was the result of the gross bullish position (longs) falling by -13 contracts (to a weekly total of 12,123 contracts) compared to the gross bearish position (shorts) which saw an increase by 87 contracts on the week (to a total of 17,162 contracts).
US Dollar Index Speculators slightly raised their bearish bets this week after three straight weeks of small declines. Dollar positioning recently turned bearish on June 16th after net positions fell by a total of -22,641 contract over the four-week period from May 26th to June 16th. This turn of sentiment broke a streak of 109 straight weeks of bullish positions dating back May 15th of 2018. The Dollar Index (DXY) has been on the defensive for four straight weeks through Friday and closed this week right around the 96.00 level.
h3 Individual Currencies Data this week: AUD And NZD Go Bullish/h3
In the other major currency contracts data, we saw two positions flip from bearish to bullish in the speculators' category this week.
Australian dollar positions rose for a sixth consecutive week this week and pushed the overall net standing into bullish territory. The Aussie has seen an improvement by a total of +45,041 contracts over the past six weeks and the net position has gone from -36,575 contracts to +4,250 contracts in that time-frame. The speculator position is now bullish for the first time since March 27th of 2018, a span of 119 weeks.
New Zealand dollar speculators also raised their bets this week and nudged the net positions into an overall bullish standing. The NZD bets have now risen in eight of the past nine weeks and have added +16,995 contracts to the positioning over that time-frame. NZD positions are at their highest level since January 28th when the position totaled +2,060 contracts.
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Overall, the major currencies that saw improving speculator positions this week were the euro (7,315 weekly change in contracts), British pound sterling (2,822 contracts), Japanese yen (1,514 contracts), Swiss franc (3,279 contracts), Australian dollar (4,944 contracts) and the New Zealand dollar (1,434 contracts).
The currencies whose speculative bets declined this week were the US dollar index (-100 weekly change in contracts), Canadian dollar (-2,957 contracts) and the Mexican peso (-3,109 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:/h3h3 Weekly Charts: Large Trader Weekly Positions vs Price/h3 h3 EuroFX:/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.
The euro large speculator standing this week totaled a net position of 110,912 contracts in the data reported through Tuesday. This was a weekly gain of 7,315 contracts from the previous week which had a total of 103,597 net contracts.
h3 British Pound Sterling:/h3The large British pound sterling speculator level totaled a net position of -13,586 contracts in the data reported this week. This was a weekly lift of 2,822 contracts from the previous week which had a total of -16,408 net contracts.
h3 Japanese Yen:/h3Large Japanese yen speculators recorded a net position of 18,326 contracts in this week’s data. This was a weekly rise of 1,514 contracts from the previous week which had a total of 16,812 net contracts.
h3 Swiss Franc:/h3The Swiss franc speculator standing this week recorded a net position of 7,057 contracts in the data through Tuesday. This was a weekly advance of 3,279 contracts from the previous week which had a total of 3,778 net contracts.
h3 Canadian Dollar:/h3Canadian dollar speculators totaled a net position of -19,775 contracts this week. This was a fall of -2,957 contracts from the previous week which had a total of -16,818 net contracts.
h3 Australian Dollar:/h3The large speculator positions in Australian dollar futures totaled a net position of 4,250 contracts this week in the data ending Tuesday. This was a weekly boost of 4,944 contracts from the previous week which had a total of -694 net contracts.
h3 New Zealand Dollar:/h3The New Zealand dollar speculative standing resulted in a net position of 1,117 contracts this week in the latest COT data. This was a weekly gain of 1,434 contracts from the previous week which had a total of -317 net contracts.
h3 Mexican Peso:/h3Mexican peso speculators totaled a net position of 11,871 contracts this week. This was a weekly decline of -3,109 contracts from the previous week which had a total of 14,980 net contracts.
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