COT Report – Analysis and Talking Points
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Source: CFTC, DailyFX (Covers up to October 22nd, released October 25th)
US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed, CAD Bulls Surge – COT Report
The latest CFTC positioning data showed that speculators slashed their USDnet long positions by $5.4bln against G10 currencies, marking the largest one-week positional change since July 7th. The notable reversal in USD positioning had predominantly been led by a $3.6bln reduction Euro net shorts, as well as speculators cutting their net shorts on the Pound by $1.6bln.
Much of the reduction in bearish sentiment on both the Euro and Pound had stemmed from the renewed Brexit optimism after the UK and EU agreed a Brexit deal. However, the latest CFTC data does not cover the period in which Brexit optimism has eased with parliament at a stalemate.
Elsewhere, investors have become increasingly bullish on the Canadian Dollar with net longs at the highest since February 2018 amid improving Canadian data, which in turn, has reduced the likelihood that the Bank of Canada will be considering near-term easing.
Yet again, safe-haven currencies are out of favour with bearish positioning in the Japanese Yen rising to $2bln (largest since mid-June), following a $1.3bln increase as political risks pertaining to US-China trade wars ease, given that prospects of a potential interim trade deal in mid-November rises.
US Dollar
EUR/USD
GBP/USD
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--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
