US dollar: speculators increased sales by 14%

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

For the fourth consecutive week, and for five out of the last six weeks, large speculators (NON-COMMERCIAL) have decreased their net position to purchase contracts on the dollar index by 0.7 thousand contracts, bringing it down to 2.4 thousand. This net position is lower than it was at this time last year, and is the lowest it has been since early July 2021.

Hedgers (COMMERCIAL) have decreased their net position to sell contracts on the dollar index by 0.6 thousand contracts, bringing it down to 1.6 thousand. Over the past 6 weeks, hedger operators have reduced the net position to sell contracts 5 times. This is the lowest net position since June 15, 2021.

The open interest rose by 1.9 thousand contracts, bringing the total to 23.9 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 0.08 over the week, bringing it to 1.18.

The Commitment of Traders (COT) report on the US Dollar Index (USDX) shows that bearish sentiment towards the US currency is on the rise. Traders have been reducing their net position on dollar growth for more than a month, and the net position of large speculators has been minimal for the past 2.5 years. In the last week, large speculators increased their sales by 14%. If this trend continues, it could lead to a further decline in the value of the US dollar.

Traders increased their positions on the appreciation of the dollar, and some of them did not exclude the possibility of a corrective bounce of the US currency.

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, usually have little 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.