US dollar: speculators are not as optimistic as hedgers


 According to COT (Commitments of Traders) reports provided by the Commodity Futures Trading Commission (CFTC) - for the week ending last Tuesday:

● Large speculators (NON-COMMERCIAL) reduced their net position for selling contracts on the dollar index by 0.05 thousand contracts to 0.45 thousand. Large speculative players reduce their net position for selling for the second week in a row.        

● Hedgers (COMMERCIAL) increased the net position for selling contracts on the dollar index by 0.8 thousand contracts to 4.5 thousand. Hedgers-operators are increasing their net position for selling for the second week in a row. The net position continued to rise from the minimum levels since March 11.        

● Open interest grew by 0.3 thousand contracts to 35 thousand.        

● The bearish index of large speculators (the ratio of the number of sell contracts to the number of buy contracts) did not change over the week, remaining at 1.02.        

Summary

COT data on the dollar index (USDX) reflects an increase in bullish sentiment for the US currency among hedgers. For the second week, hedgers-operators trading for a longer period is building up their net position on the growth of USD. At the same time, the net position of hedgers continued to grow from the lowest levels for the last 3.5 months. The continuation of this trend may promote the growth of the American currency.

Large speculators increased their purchases and sales, which almost did not change the small net position for a decline in USD. If they join the hedgers next week, the dollar could gain additional growth momentum.

Note: COT report data is fundamental and is used primarily for medium to long-term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade with the trend. Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend. The net position is the difference between the number of buy and sell contracts (the green line on the chart is the net position of large speculators; the blue line is the net position of hedgers). Open interest is the sum of all open positions in the market.

 

 

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