COT Report – Analysis and Talking Points
- GBP/USD Rise Fuelled by Short Squeeze
- EUR/USD Bearish Bets Sharply Increase
- USD Longs Added for the First Time Since Beginning of August
The Predictive Power of the COT Report
Source: CFTC DailyFX (Covers up to September 3rd, released September 6th)
GBP/USD Boosted by Short Squeeze, EUR/USD Bears Surge Ahead of ECB – COT Report
The latest CFTC positioning data show that investors added to their US Dollar long positions for the first time since the beginning of August as bullish bets rose by $2.496bln to $16.178bln vs G10 currencies. The main factor behind the gains in USD long position had been the increasingly bearish sentiment on the Euro ahead of the ECB meeting. The Euro saw a sizeable $1.3bln increase in net shorts to $6.74bln, which had primarily stemmed from the boost in outright Euro shorts.
Elsewhere, net shorts in the Pound had been scaled back for a 4th consecutive week, signaling that much of the negative news had been priced in the Pound. As such, the continued short squeeze has underpinned the Pound in recent sessions.
Speculators marginally cut back on their bearish bets in the Australian Dollar, which now sits at $4bln. As such, in light of the recent improvement to risk appetite, there is a potential for further upside risks to AUDUSD as investors unwind their bearish bets in the currency.
US Dollar
EUR/USD
GBP/USD
AUD/USD
