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Monday, April 19, 2021

U.S. Dollar Speculators Trim Bearish Bets

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US Dollar Index Speculator Positions

Large currency speculators cut back on their bearish net positions 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.

USD Index COT Futures Large Traders Positions

USD Index COT Futures Large Traders Positions

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of -7,515 contracts in the data reported through Tuesday August 18th. This was a weekly rise of 667 contracts from the previous week which had a total of -8,182 net contracts.

This week’s net position was the result of the gross bullish position (longs) rising by 337 contracts (to a weekly total of 18,587 contracts) while the gross bearish position (shorts) declined by -330 contracts on the week (to a total of 26,102 contracts).

US Dollar Index speculators reduced their bearish bets this week following higher bearish bets in four out of the previous five weeks. This week’s pullback in bearish bets by 667 contracts follows a total gain by -3,243 bearish bets in the previous five weeks. Overall, the dollar sentiment continues to be in bearish territory (-7,515 contracts) for the tenth straight week and has been over -5,000 contract level for the past six straight weeks.

The Dollar Index price has been under heavy pressure lately with a close around the 93.20 level this week. This is down from trading above the 100.00 level as recently as the middle of May.

Individual Currencies Data this week: NZD, GBP rise in to bullish levels

In the other major currency contracts data, we saw the euro cool off a bit after a huge run while the British pound sterling and the New Zealand dollar rose into new bullish positions this week in the speculators category.

British pound sterling positions rose for a third straight week this week and moved into a new bullish position. The GBP speculators sentiment has been steadily improving each week and their bets have now risen in seven out of the past eleven weeks with traders adding a total of +42,548 net contracts in that time-frame. The climb into a new bullish position marks the first time GBP bets have been in long or bullish territory since April 14th, a streak of 18 weeks. The GBPUSD currency pair has also benefited from the positive sentiment and reached a multi-month high this week by ascending the 1.3250 exchange rate.

New Zealand dollar speculators also boosted their sentiment and pushed the kiwi dollar bets into a new bullish position this week. The NZD positions have risen for two straight weeks and in eleven out of the past fourteen weeks which has added a total of +19,640 contracts to the position (in the last 14 weeks). The NZDUSD currency pair has been on a strong run since early March but has slipped a bit in recent weeks with the pair trading around the 0.6515 exchange rate this week.

Euro positions fell this week following gains in the previous six weeks that had pushed the overall position to an all-time record high. This week’s small decline still leaves the current bullish position (+196,943 contracts) very close to the +200,000 net contract level which is just a few contracts above last week’s record high. Euro positions have been surging since late in February and have now risen in twenty out of the past twenty-five weeks with a total gain of +310,964 contracts in that time-frame. The EURUSD currency pair this week touched its highest level since May 2018 at just below the 1.20 exchange rate.

Overall, the major currencies that saw improving speculator positions this week were the US dollar index (667 weekly change in contracts), British pound sterling (9,325 contracts), Australian dollar (188 contracts) and the New Zealand dollar (3,941 contracts).

The currencies whose speculative bets declined this week were the euro (-2,808 weekly change in contracts), Japanese yen (-6,432 contracts), Swiss franc (-2,658 contracts), Canadian dollar (-4,040 contracts) and the Mexican peso (-2,169 contracts).

Chart: Current Strength of Each Currency compared to their 3-Year Range

Current Strength Of Each Currency

Current Strength Of Each Currency

The 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.

Table of Large Speculator Levels & Weekly Changes:

Table Of Large Speculator Levels & Weekly Changes

Table Of Large Speculator Levels & Weekly Changes

This 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.

Weekly Charts: Large Trader Weekly Positions vs Price

EuroFX:

Euro COT Futures Large Trader Positions

Euro COT Futures Large Trader Positions

The Euro large speculator standing this week came in at a net position of 196,943 contracts in the data reported through Tuesday. This was a weekly lowering of -2,808 contracts from the previous week which had a total of 199,751 net contracts.

British Pound Sterling:

GBP COT Futures Large Trader Positions

GBP COT Futures Large Trader Positions

The large British pound sterling speculator level reached a net position of 6,504 contracts in the data reported this week. This was a weekly boost of 9,325 contracts from the previous week which had a total of -2,821 net contracts.

Japanese Yen:

JPY COT Futures Large Trader Positions

JPY COT Futures Large Trader Positions

Large Japanese yen speculators resulted in a net position of 20,584 contracts in this week’s data. This was a weekly fall of -6,432 contracts from the previous week which had a total of 27,016 net contracts.

Swiss Franc:

CHF COT Futures Large Trader Positions

CHF COT Futures Large Trader Positions

The Swiss franc speculator standing this week came in at a net position of 14,507 contracts in the data through Tuesday. This was a weekly reduction of -2,658 contracts from the previous week which had a total of 17,165 net contracts.

Canadian Dollar:

CAD COT Futures Large Trader Positions

CAD COT Futures Large Trader Positions

Canadian dollar speculators equaled a net position of -33,587 contracts this week. This was a lowering of -4,040 contracts from the previous week which had a total of -29,547 net contracts.

Australian Dollar:

AUD COT Futures Large Trader Positions

AUD COT Futures Large Trader Positions

The large speculator positions in Australian dollar futures recorded a net position of -3,300 contracts this week in the data ending Tuesday. This was a weekly lift of 188 contracts from the previous week which had a total of -3,488 net contracts.

New Zealand Dollar:

NZD COT Futures Large Trader Positions

NZD COT Futures Large Trader Positions

The New Zealand dollar speculative standing came in at a net position of 3,762 contracts this week in the latest COT data. This was a weekly gain of 3,941 contracts from the previous week which had a total of -179 net contracts.

Mexican Peso:

MXN COT Futures Large Trader Positions

MXN COT Futures Large Trader Positions

Mexican peso speculators came in at a net position of 4,338 contracts this week. This was a weekly decline of -2,169 contracts from the previous week which had a total of 6,507 net contracts.

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