Forex: Currency Speculators boost US Dollar longs as bets against Euro hit new record

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators boosted their overall US dollar long positions last week for a fourth consecutive week as the outlook for the global economy deteriorates and traders seek a safe haven in the US dollar.

Non-commercial futures traders, including hedge funds and large speculators, increased their bets in favor of the US dollar against the euro, Australian dollar, New Zealand dollar, British pound sterling and the Canadian dollar. Speculator positions in the Japanese yen, Swiss franc and Mexican peso, although still in bearish territory, improved last week against the American currency.

Individual Currencies:

EuroFX: Currency speculator sentiment dropped for the euro currency once again last week as euro net short positions or bets against the currency rose to a new record high. Euro short positions increased to 203,415 contracts on May 29th from the previous week’s total of 195,361 net short contracts on May 22nd. This is the third straight week Euro short positions have reached a new record level.


The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions decreased last week for a third week after peaking at the highest level in over a year on May 8th. British pound positions saw a total of 1,475 net long contracts on May 29th following a total of 11,340 net long contracts registered on May 22nd.

 

JPY: Japanese yen speculative contracts improved last week for a seventh consecutive week. Yen positions totaled 11,330 net short contracts reported on May 29th following a total of 18,015 net short contracts on May 22nd. Japanese positions have benefited from the heavy risk aversion in the markets and the JPY has pared losses against the US Dollar in the spot price forex market.

 

CHF: Swiss franc speculator positions improved after decreasing sharply for the previous two weeks. Speculator positions for the Swiss currency futures registered a total of 30,596 net short contracts on May 29th following a total of 34,851 net short contracts as of May 22nd.

 

CAD: Canadian dollar positions declined last week for a fourth straight week after reaching the highest level of the year on May 1st. Canadian dollar positions declined to a total of 34,085 net long contracts as of May 29th following a total of 38,555 long contracts that were reported for May 22nd.

 

AUD: The Australian dollar positions dropped sharply for a fourth consecutive week and brought Aussie positions further negative after crossing over to the short side for the first time in years on May 22nd. Aussie positions declined to a total net amount of 35,527 short contracts on May 29th after falling to 16,898 net short contracts as of May 22nd. AUD speculative positions are now at the lowest level since at least 2009 and two weeks ago fell below the previous low level of the last 12 months that was a total of 5,167 contracts on September 26th of 2011.

 

NZD: New Zealand dollar futures speculator positions declined for a sixth straight week as positions for the Kiwi turned further negative. NZD contracts decreased to a total of 5,208 net short contracts as of May 29th following a total of 1,509 net short contracts on May 22nd. This is the lowest level for New Zealand Kiwi contracts since at least 2009.

 

MXN: Mexican peso speculative contracts improved slightly after declining for three consecutive weeks. Peso positions improved to a total of 12,995 net short speculative positions as of May 29th following a total of 16,116 long contracts that were reported for May 22nd. The May 22nd level was the lowest standing for Mexican peso contracts since January 17, 2012 when contracts were a total of 17,328 short positions.

COT Currency Data Summary as of May 29, 2012
Large Speculators Net Positions vs. the US Dollar

EUR -203415
GBP +1475
JPY -11330
CHF -30596
CAD +34085
AUD -35527
NZD -5208
MXN -12995