US dollar: hedgers increased positions for growth by 69%

The Commodity Futures Trading Commission (CFTC) reported, for the week ending last Tuesday, that the Commitments of Traders (COT) reports showed.

Non-commercial large speculators have been increasing their net position to buy contracts on the dollar index for the past three weeks, with the most recent increase of 9.6 thousand contracts bringing the total to 15.6 thousand. This is the highest net position since January 31 and surpasses the levels seen in June.

Hedgers (COMMERCIAL) increased their net position to sell contracts on the dollar index by 9.6 thousand contracts, bringing the total to 17.3 thousand. This marks the third consecutive week of increased net position selling, and is the highest since June 27.

The open interest decreased by 1,700 contracts, bringing the total to 39,200.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators increased by 1.43 over the week, reaching a total of 2.75.

Data from the COT Dollar Index (USDX) shows a strong surge in bullish sentiment for the US dollar. Over the past week, traders have significantly increased their net position on the dollar, with the net position of large speculators reaching its highest level in almost eight months. Large speculators have reduced their sales by 53% over the week, which could lead to further appreciation of the US currency if the trend continues.

The quarterly expiration of currency futures could potentially distort the latest report data. Nevertheless, hedgers increased their sales of the dollar by 69% over the course of the week.

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, generally do not have a major impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go against the trend (black line). The net position is the difference between the number of buy and sell contracts. Open interest is the total of all open positions in the market.