US dollar: uncertainty keeps things interesting

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

For the past five weeks, large speculators (NON-COMMERCIAL) have been fluctuating between increasing and decreasing their net position to buy contracts on the dollar index. Currently, their net position stands at 19.5 thousand contracts, which is close to the highest level since December 13 of last year. This is an increase of 0.5 thousand contracts from the previous week.

Operator hedgers slightly increased their net selling position in dollar index contracts by 0.1 thousand contracts to 20.2 thousand after a 2-week contraction.

The open interest decreased by 1,600 contracts, bringing the total to 41,600.

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 0.11 over the week, reaching 3.32.

Data from the COT dollar index (USDX) indicates a rise in bullish sentiment for the US dollar. Net positions on dollar growth have slightly increased, and are close to the highest levels seen in the past 11 months. During the week, large speculators increased their purchases by 1%, while sales were also reduced. If this trend continues, it could lead to further appreciation of the US dollar.

For the past 4 weeks, the net position has remained relatively stable, suggesting a lack of clarity in the market.

The most recent COT report was postponed due to US holidays. COT reporting data is essential and is mainly used for medium to long-term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) trade in line with the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, usually do not have a major 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.