Weekly CFTC COT Forex Positioning: Mixed Dollar Performance

According to calculations done by Reuters, the value of net long dollar positions for the week ending July 28 only saw a small increase from $29.77 billion to $29.79 billion. And the latest Commitments of Traders forex positioning report from the CFTC reveals that the Greenback had a mixed performance, losing some ground to the euro, the pound, and the Kiwi, while winning out against the other lower-yielders and the remaining comdolls.

Keep in mind that these numbers show net positioning against the of non-commercial traders against the U.S. dollar. If you’re feeling overwhelmed by all these figures, you might need to review our School of Pipsology lesson on How to Gauge Market Sentiment Using the COT Report in order to learn how to pinpoint potential forex market reversals.

CFTC COT Forex Positioning (July 28, 2015)

CFTC COT Forex Positioning (July 28, 2015)

Lemme break down the latest numbers for y’all:

  • Non-commercial traders are still net bullish against the euro, the pound, the yen, and the commodity currencies.
  • The yen continued to slide further into bearish territory, but at a slower rate when compared with last week.
  • The U.S. dollar continues to advance against the commodity currencies, except for the Kiwi, which saw another round of declining net bearish bias.
  • Forex traders drastically trimmed their net short positions on the pound.
  • Traders also trimmed their net short position on the euro but to a lesser extent.
  • The Swiss franc looks like it’s about to see a reversal of fortune versus the U.S. dollar since franc bulls just barely kept the currency from going into the red.

Aside from more demand for the euro, the perceived normalization in the Greek situation led to the liquidation of safe-haven positions (Hey, that rhymes!) as risk-appetite made a comeback near the end of the week ending July 28. The Swiss franc and the yen ultimately got the brunt of it, but the U.S. dollar managed to hold its ground due perhaps to the pleasantly better-than-expected readings for both headline and core durable goods orders as well as continued expectations for a rate hike within the year.

The returning risk-on sentiment also gave a boost to the high-yielding Kiwi and pound. Nevertheless, the pound would probably still have made some gains against the U.S. dollar because the latest MPC meeting minutes revealed that MPC members are becoming a bit more hawkish and because the preliminary reading for Q2 2015 GDP came in at +0.7% as expected (+0.4% previous).

Moving on, commodity prices were probably the bane of the other commodity currencies: falling gold prices stifled demand for the Aussie while declining oil prices likely caused the Loonie to decline. In fact, oil prices declined by almost 20% for the month ending July 28, which is not happy news at all for oil producers like Canada.

Got any other conclusions you can draw from this latest COT Report? Feel free to share your thoughts in the comments section or if you’re looking for further discussion, community member ForExchange has a lively thread called Trading based on Market Sentiment in the forums awaiting your participation.

  • ForExchange

    Hi Forex Ninja,

    I think it is very true what you wrote about the CHF. I do believe finally we are in transition and will see a clear trend change. Fundamentals for me did not confirm anyway the strong CHF rally, which might be over soon.

    I will be interested to see GBP net position in two weeks after the pound loss yesterday (the numbers from yesterday are not in the report which comes out today).

    And I liked the “against the US dollar” part 🙂

    Have a nice weekend,
    FE

    • I’m keeping close tabs on CHF positioning also! It’s really interesting how it managed to stay in the green against the dollar but yep it looks like we’re about to see a trend change. Glad to read your thoughts on my posts!

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