US dollar: traders reduced their net position by five times

The CFTC's COT report for the week ending on Tuesday showed that:

For the fifth consecutive week, large speculators (NON-COMMERCIAL) have decreased their net buying position on the dollar index by 2.9 thousand contracts, bringing it down to 3.1 thousand. This is the lowest net position since the start of July 2021.

Hedgers (COMMERCIAL) decreased their net selling position on the dollar index by 2.8 thousand contracts, bringing it down to 3.6 thousand. This marks the fifth consecutive week that hedger operators have reduced their net selling position.

The number of open contracts decreased by 3.1 thousand, bringing the total to 31.4 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.20 over the week, settling at 1.20.

The Commitment of Traders (COT) report data on the dollar index (USDX) has revealed a strong bearish sentiment on the US currency. Over the past month, traders have reduced their net position on the growth of the dollar by five times. Last week, the net position even reached its lowest level in two years. Large funds decreased their purchases of the dollar by 22% in a week, while sales were also increased. If this trend continues, it could lead to a further decline of the US currency.

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 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, while open interest is the total of all open positions in the market.