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Article / 30 May 2016 at 6:41 GMT

COT: Biggest week of dollar buying since last October

Head of Commodity Strategy / Saxo Bank
  • Brexit shorts continued to reduce as polls began swaying towards the stay vote
  • The AUD dollar position returned to neutral following four weeks of heavy selling
  • Half the dollar increase stemming from a 63% reduction in bullish JPY bets
Dollar fever: Steady buying in May turned into a major rush last week. Photo: iStock

By Ole Hansen

Hedge funds accelerated the buying of dollars during the week ending May 24. According to the latest data from the CFTC released Friday night they bought the biggest amount of dollars in a single week since last October.

Steady buying of dollars at the beginning of May turned into a major rush last week. Some $8.4 billion were bought against the eight IMM currency futures tracked in this. 

Speculative IMM currency positioning
Source: Bloomberg/Saxo Bank

All currencies were net-sold apart from GBP, where Brexit shorts continued to be reduced as the polls began swaying towards the stay vote.

The EUR never managed to turn net-long during the buying seen these past few months. Last week selling increased the net-short by 68% to a four week high.

The AUD dollar position returned to neutral following four weeks of heavy selling.

Speculative IMM currency positioning

Source: Bloomberg/Saxo Bank

The JPY took the brunt of the selling with half the dollar increase stemming from a 63% reduction in bullish JPY bets. Funds have been long JPY since the beginning of the year but last week’s selling triggered the biggest single week reduction since November 2012.

Source: Bloomberg/Saxo Bank

-- Edited by Adam Courtenay

Ole Hansen
is head of commodities strategy at Saxo Bank
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Commitments of Traders: IMM currency futures


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