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CashBackForex - Often Imitated, Never Duplicated!
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Speculators Flip to Long Side of the USD-COT Report Nov 20 2012
Submitted by Ralph Shell
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6:25 AM Nov 27 2012
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1861 Views |
0 Comments
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 (4 Votes)
The current COT report show that the net combined position of currency speculators flipped to the long side of the USD. Flipping positions is not a common occurrence. Currency speculators had been short the USD for the past three months. After Bernanke's announcement in September about the Fed's intention to embark on QE3, the short USD position ballooned to 267,878 contracts short on the September 25th report. The latest report shows the specs are net long 52,244 USD contracts.
It interesting to note, the combined spec net position had been long the USD from September 13th 2011 until that position was flipped to the USD short side on August 21st 2012. In this eleven month period, there were many weeks when specs were long over 200K contracts and several weeks the USD long was over 400K contracts.
There are a number of reasons for the reincarnation of the USD long. The biggest USD long is versus the euro. Large specs have remained short the euro, and they have extended their position during the past month. The total euro short is 114.7K contracts.
The second biggest USD long is against the yen. The announcement of the snap election has prompted active yen selling. The total yen short is up to 96,294 contracts.
Speculators continue to cling to their long positions in the 'commodity currencies'. The total long Canadian, New Zealand, and Australian Dollars versus a short in the USD was 168.6K contracts. This was down slightly from when the pundits were all touting commodities as a get rich investment in any country that produced commodities, a response to Bernanke's easy money policies.
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US Dollar Index: There was a small increase in the total spec net long position from 6,283 contracts to 6,469 contracts. This increase in the net long was achieved by reducing existing short positions. This change is not an aggressive commitment to the long side, as an increase in open interest accomplished by new purchases.
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Euro (EUR/USD): The large spec added to his short euro position and is now a 3.6 ratio short, almost 95K net short. Small specs are modest shorts. The total spec short in the euro was 114.7K contracts. Market actions since the cut-off date for this report has hurt those holding short positions.
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British Pound Sterling (GBP/USD): Specs are still long the pound but that position has been reduced. The large spec is approaching a net even position, not by reducing his open longs but by taking 7.9K of new short contracts. The small spec remains about 10K long.
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Japanese Yen (JPY/USD): There has been a surge in the trading interest in the yen. The total OI was up 36.7K contracts. Both size yen specs added to their short positions taking the total short position to 96.3K contracts. Large specs are now a 2.8 ratio short, and the small spec is a 3.9 short. There has also been a pick in option trading, 7.4K contracts in the latest period. The pick-up in the yen selling has followed the announcement of a new election.
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Swiss Franc (CHF/USD): Specs remain SF shorts though the small specs did reduce their short commitment. Large specs remain a 2.7 ratio short. Recent market action has favored the SF long versus the USD.
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Canadian Dollar (CAD/USD): Large spec remain an unbalanced 7-to-1 ratio long in the C$ though they did reduce their net position by 4.6K contracts. The total spec net long has been reduced to 75.3 contracts, down from 83.8K last week. The recent market action has favored slightly the C$ bulls.
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New Zealand Dollar (NZD/USD): The large spec liquidated a small portion of his long but remains a 5 ratio long. Small specs are also long, but by less than a 2 ratio. The OI in this contract is small, less than 30K contracts.
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Australian Dollar (AUD/USD): Combined the two spec groups have a 73.8K bet on the long side of the A$, slightly less than 76.2K in the prior period. The large trader is a 2.6 ratio long. Market action, though subdued, has slightly favored the longs after the end of the cut-off.
Currency Commitments of Traders with Delta-adjusted Options and Futures Combined,
data through November 20, 2012 |
| US Dollar Index (USD/EUR,JPY,GBP,CAD,CHF,SEK) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
|
| Contracts: |
40,328
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27,434
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22,309
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3,508
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2,164
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6,994
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13,463
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| Change:
|
809
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-278
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-326
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-187
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-324
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1,396
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1,580
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| % Open Interest:
|
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68.0
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55.3
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8.7
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5.4
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17.3
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33.4
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| Euro (EUR/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
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| Contracts: |
272,749
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35,993
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130,848
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41,764
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61,613
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170,409
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55,704
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| Change:
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1,560
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-3,468
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5,750
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-2,557
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-1,381
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6,881
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-3,513
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| % Open Interest:
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13.2
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48.0
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15.3
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22.6
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62.5
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20.4
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| British Pound Sterling (GBP/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
|
| Contracts: |
160,072
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47,140
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45,051
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32,152
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22,011
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74,978
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87,208
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| Change:
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2,082
|
495
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7,938
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-2,767
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-1,150
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2,759
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-6,303
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| % Open Interest:
|
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29.4
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28.1
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20.1
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13.8
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46.8
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54.5
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| Japanese Yen (JPY/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
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| Contracts: |
205,884
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27,890
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78,093
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15,850
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61,941
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148,032
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51,738
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| Change:
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36,755
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6,529
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25,450
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2,267
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7,731
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20,558
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-3,827
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| % Open Interest:
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13.5
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37.9
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7.7
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30.1
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71.9
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25.1
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| Swiss Franc (CHF/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
|
| Contracts: |
47,167
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7,220
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19,708
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12,820
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16,021
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27,011
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11,322
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| Change:
|
-718
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-4,168
|
-568
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1,597
|
-753
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1,881
|
631
|
| % Open Interest:
|
|
15.3
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41.8
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27.2
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34.0
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57.3
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24.0
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| Canadian Dollar (CAD/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
|
| Contracts: |
184,658
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71,887
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10,154
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36,804
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23,263
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68,671
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143,946
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| Change:
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1,581
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-3,104
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1,572
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-2,038
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1,334
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6,693
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-1,354
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| % Open Interest:
|
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38.9
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5.5
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19.9
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12.6
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37.2
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78.0
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| New Zealand Dollar (NZD/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
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| Contracts: |
29,758
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21,436
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3,578
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4,013
|
2,265
|
4,087
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23,693
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| Change:
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-3,495
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-2,256
|
-920
|
-307
|
309
|
-932
|
-2,884
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| % Open Interest:
|
|
72.0
|
12.0
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13.5
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7.6
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13.7
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79.6
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| Australian Dollar (AUD/USD) |
| |
|
(1) Large Traders |
(2) Small Traders |
(3) Commercial
|
| |
Open Interest
|
Long |
Short |
Long |
Short |
Long |
Short
|
| Contracts: |
192,282
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103,448
|
39,829
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34,832
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24,649
|
47,942
|
121,744
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| Change:
|
-1,819
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-1,736
|
2,356
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-1,187
|
-2,849
|
16
|
-2,413
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| % Open Interest:
|
|
53.8
|
20.7
|
18.1
|
12.8
|
24.9
|
63.3
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To view the COT report released by the CFTC please see the attached files.
For general information about the COT report please see the article The CFTC Commitments of Traders (COT) Report
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Comments
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Shortcuts and Syndication
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Author Bios
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Ralph Shell: Ralph did his graduate studies in economics and history at Duke University. He has ten years experience trading cash commodities in domestic and export markets and is a former commodity analyst with Merrill Lynch in Chicago. He was a member of and floor trader at the Chicago Board of Trade for 18 years.
Forex Captain: The Forex Captain has been a strategy developer and forex trader since 1998. From 2002 till 2009 he ran a successful managed account based on his tradestation coded strategies at FXCM. In 2007 his managed fund was ranked in BarclayHedge Rankings as one of the Top 10 Currency Traders managing less than $10M & more than $1M. Since 2009 he has been developing Expert Advisors in MQL4 for private trading, and from June 2010 he has joined the Project Triumph team as a currency analyst and project manager.
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