Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 15 January 2018 at 8:56 GMT

COT: Dollar short doubles on continued euro buying – #SaxoStrats

Head of Commodity Strategy / Saxo Bank
  • Huge rise in non-commercial USD short in week ending Jan 9
  • The week saw the dollar fall to its lowest since September
  • The euro experienced continued strong demand

By Ole Hansen

The non-commercial dollar short against eight IMM currency futures doubled to $9.2 billion in the week to January 9. A week that ended with the dollar falling to the lowest since September against its G-10 peers. The euro continued to see strong demand with the net-long rising to a fresh record. 

Another major contributor to the rising dollar short was as sharp reversal of the aggressive selling that had hit the AUD in recent weeks. The buying of 25,492 lots (AUD 2.5 billion) turned the position back to a net long. 

Speculative IMM currency positioning
Speculative IMM currency positioning
The IMM EUR net-long reached a fresh record last Tuesday ahead of (a) European Central Bank minutes that  mentioned the bank being open to revisiting its policy guidance and (b) news that Germany was heading for a grand coalition.

Speculative positioning in IMM EUR
JPY short-sellers got wrong footed by the potential sign from the Bank of Japan that it is preparing to scale back it monetary stimulus. Ahead of JPY's sharp rally last Wednesday, funds had increased bearish JPY bets to 125,526 lots and it remains by far the most shorted of the G8 currencies. 

Speculative positioning in IMM JPY
COT on bonds and stocks

– Edited by Clare MacCarthy


Ole Hansen is head of commodity strategy at Saxo Bank

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COT on IMM currency positions in week to January 9

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COT on bonds, VIX and equity index futures in week to January 9


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