Currency Speculators Reduced USD Index Bets For 1st Time In 20 Weeks

September 9, 2018

US Dollar Index COT Futures Large Traders Vs UUP

US Dollar Index Non-Commercial Speculator Positions:

The latest data for the weekly Commitment of Traders (COT) report, released by the Commodity Futures Trading Commission (CFTC) on Friday, showed that large speculators cut back on their bets for the US Dollar Index futures markets this week for the first time in twenty weeks.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 33,486 contracts in the data reported through Tuesday September 4th. This was a weekly decline of -1,085 contracts from the previous week which had a total of 34,571 net contracts.

Speculative bets in favor of the US Dollar Index had gained for the previous nineteen weeks in a row to the highest level since May of 2017 before this week’s decline. Despite the shortfall, the bullish position remains above the +30,000 contract level for a fifth consecutive week.

Individual Currency Contract Data this week:

In the individual currency contracts data, we only saw one substantial change (+ or – 10,000 contracts) in the speculators category.

  • Euro contracts rose by over 15,000 contracts this week following five straight weeks of declining bets that pushed bets into bearish territory over the past three weeks. This week’s jump boosted the euro position back into an overall bullish position and to the best level in a month

Overall, in the major currency contracts on the week, speculators bet in favor of the euro (15,182 weekly change in contracts), British pound sterling (7,315 contracts), Swiss franc (4,350 contracts) and the Australian dollar (602 contracts).

The currencies whose speculative bets declined this week were the US Dollar Index (-1,085 weekly change in contracts), Japanese yen (-5,891 contracts), Canadian dollar (-1,518 contracts), New Zealand dollar (-967 contracts) and the Mexican peso (-6,818 contracts).

See the table below.

Net Commercials

Weekly Chart: Large Trader Weekly Positions vs Price

EuroFX:

*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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