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Peter Davis

An writer at FOMOdrive

  • Jun 19, 2023
  • 2 min read

US dollar: speculators cut sales by a third

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

After a weekly decline, large speculators (NON-COMMERCIAL) increased their net buying position on the dollar index by 1.8 thousand contracts to 14 thousand. This is the highest net position since April 4th, and marks the third week out of the last four that large speculative players have increased their buying.

Hedgers (COMMERCIAL) have been increasing their net sell position on dollar index contracts for 3 of the last 4 weeks, bringing it up to 16.7 thousand contracts - a 1.5 thousand contract increase from the previous week. This is the highest net position since March 21.

The open interest decreased by 1,900 contracts, bringing the total to 32,100.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.69 over the course of the week, bringing it up to 2.66.

The Commitment of Traders (COT) report data on the dollar index (USDX) indicates that bullish sentiment on the US currency is on the rise. After a week-long hiatus, traders have resumed accumulating net positions in favor of the dollar's growth. This has resulted in the net position reaching its highest level in over two months. Large funds have reduced their sales by 33% in the past week. If this trend continues, it could lead to further appreciation of the US dollar.

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little influence 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, while open interest is the total of all open positions in the market.

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