US dollar: speculators increased sales by 13% over the week

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

For the second week in a row, and for 3 weeks out of the last 4, large speculators (NON-COMMERCIAL) have decreased their net position to purchase contracts on the dollar index by 13.7 thousand contracts, bringing it down to 3.9 thousand. This is the lowest net position since September 5.

Hedger operators have decreased their net position to sell contracts on the dollar index by 14.9 thousand contracts over the last 4 weeks, bringing it down to 3.2 thousand. This is the lowest net position since August 8.

The number of open contracts decreased by 19.6 thousand, bringing the total to 21.7 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators decreased by 1.35 over the week, settling at 1.33.

The Commitment of Traders (COT) report on the US Dollar Index (USDX) has revealed a sharp increase in bearish sentiment for the US currency. Traders have significantly reduced their net position on dollar growth, with the net position now at its lowest level in months. If this trend continues, it could lead to a further decline in the value of the US dollar.

The quarterly expiration of currency futures could potentially distort the latest report data; however, large speculators increased dollar sales by 13% over the week in spite of this.

COT reporting data is essential for medium to long term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) tend to follow the trend (blue line). On the other hand, small speculators, NONREPORTABLE POSITIONS, usually do not have much of an effect on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually trade 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.