US Dollar: CME traders don't believe in USD growth
According to the COT (Commitments of Traders) reports provided by the Commodity Futures Trading Commission (CFTC) - for the week ended last Tuesday:
- Large speculators (NON-COMMERCIAL) reduced the net position to buy contracts on the dollar index by 0.8 thousand contracts to 2.7 thousand.
- Large speculative players cut their net buy position for the second week in a row. The net position continued to decline from the highest levels since the beginning of June 2020.
Hedgers (COMMERCIAL) reduced the net position for selling contracts on the US Dollar Index by 1.2 thousand contracts to 5.5 thousand. Hedger operators also cut their net sell position for the second week in a row. Open interest decreased by 0.2 thousand contracts to 36.7 thousand.
The bullish index of large speculators (the ratio of the number of contracts for buying to the number of contracts for selling) fell by 0.04 to 1.13 for the week.
Summary: COT reports on the US Dollar Index (USDX) reflect the growth of bearish sentiment in the US currency. For the second week, traders are reducing their net position on the dollar's growth. At the same time, the net position continued to decline from the levels that were the highest in the last 11 months. Large funds have reduced purchases of the dollar by 3% for the week. The continuation of this trend may contribute to the decline of USD.
Note: COT report data is fundamental and is mainly used for medium and long-term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade according to 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.