Speculators Continue to Hold Big USD Short


CashBackForex Representative
Commitments of Traders (COT) Report, 16 October 2012. The most recent weekly COT report show that the specs are short the Euro, and they have even larger positions short the USD and long the commodity currencies (Canadian, New Zealand, and Australian Dollars). The position, long these three currencies, and short the USD, is 181,304 contracts.

The biggest USD short position is against the Canadian Dollar. The C$ has been weakening against the US during the past week but the short interest remains quite large.

Position in these currencies exceeds the size of the short euro versus the USD; that short Euro long the USD position was down to 73, 933 contracts from the preceding weeks' 86 ,511 contracts. During the early summer the short in the euro exceeded 230K.

There has also been a lively trade in the British pound. Specs are now long the pound and short the USD. The last tally has been 43,390 contracts, a small increase from the previous week.

US Dollar Index: Large specs remain the dominant player in this market. In this report, the large spec remained short the DI 5.2K. Small specs are long, but only by about 800 contracts.

Euro (EUR/USD): There was a small reduction in the OI as the large spec reduced their net short position by about 18K. Large specs remain better than a 2-to-1 ratio short in the Euro. Small specs increased their Euro short by almost 8K contracts during the latest period. But the bottom line is the spec short position remains about 74K, down from 86.5K in the prior week.

British Pound Sterling (GBP/USD): OI in the pound has been large, and increased by another 3.4K contracts to 173.6K contracts. The small spec was buying in the period, and end up slightly better than a 2 ratio long. Large specs are also long but reduced their positions.

Japanese Yen (JPY/USD): Small specs have been short the yen and the large specs have been long. Since the yen has been weakening, the small spec has been the winner. Small specs are now approaching a 2-to-1 short. The OI in options has been growing and now represents 4.9% of the market, though the total OI of the yen contract is not real large.

Swiss Franc (CHF/USD): The small specs continue to add to their long positions in the SF as they are now long 48.4% of the total OI. On the other side of the market is both the commercial and the large spec.

Canadian Dollar (CAD/USD): The OI remains quite large in the C$, and the specs are long. The small spec is a modest 2.3 ratio long but the large specs are a 9.5-to-1 long. Since the cut-off date for this report, the C$ has weakened against the USD, and that trend is continuing today. The Canadian government's rejection of the acquisition of the Progress Energy Resource Corp by the big Malaysian oil giant Petronas is weighing on the C$.

New Zealand Dollar (NZD/USD): The Kiwi remains a favorite spec long. Large specs are a 4.7 ratio long and the small specs are a 3-to-1 long. There were very small reductions in the long position during the period.

Australian Dollar (AUD/USD): The large spec remains about a 2-to-1 long in the Aussie. The other side of this position is held by the commercial which is the long. The small spec is a very small long. The big long position which had been over 100K contracts three weeks ago is now down to just 40.5K. Once the selling abated, there was a small rally in the A$. The total OI, 175.8 show that trading interest remains high in the A$.


The COT Report reflects a condensed version of currency traders collective market votes as derived from the U.S. Commodity Futures Trading Commission’s weekly data output.* Any opinions, news, research, analyses, prices, or other information contained in this discussion post are provided as general market commentary, and do not constitute investment advice from CashBackForex.com