US dollar: speculators updated their net position highs for 11 months

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 increased their net position to purchase contracts on the dollar index by 0.3 thousand contracts, bringing the total to 19.7 thousand. This marks the second consecutive week that these large speculative players have increased their net position, surpassing October levels and reaching the highest point since December 13 of last year.

Hedgers (COMMERCIAL) increased their net position to sell contracts on the dollar index by 0.2 thousand contracts to 20.4 thousand, marking the second consecutive week of such an increase. This net position is the highest it has been since October 24.

The number of open contracts decreased by 2.4 thousand, bringing the total to 38.8 thousand.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators rose by 0.30 to 3.62 over the week.

Data from the COT dollar index (USDX) indicates a rise in bullish sentiment for the US dollar. Trading activity decreased, resulting in a slight increase in the net position of those betting on the dollar's appreciation. Additionally, the net position of large speculators reached its highest level in the past 11 months. If this trend continues, it could lead to further appreciation of the US dollar.

The net position has remained relatively unchanged over the past 5 weeks, suggesting a degree of market uncertainty.

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 impact 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.