FX Futures Positioning: USD, EUR, CHF, AUD, CAD | COT report

The US dollar is quietly regaining favour among futures traders, but this isn’t a classic “risk-off” move.

Instead, the latest COT data suggests a broader clean-up of positioning, with traders reducing exposure across FX markets as geopolitical risks and volatility rise.

 

 

 

COT Report Shows USD Rebound as EUR Weakens and AUD Sentiment Peaks

Large Speculator Positioning from the COT report

 

Source: CFTC (COT), LSEG

 

• US Dollar: Large speculators flipped to net-long exposure on the US dollar index, while asset managers pushed their net bullish exposure to a fresh one-year high.
• EUR/USD: Long positions continued to fall while shorts rose among both groups, with large speculators on the cusp of flipping to net-short exposure.
• GBP/USD: Short bets declined by 17% and 18% among large speculators and asset managers, respectively.
• USD/JPY: Asset managers flipped to net-short yen futures, large speculators increased net-short exposure to a 20-month high.
• USD/CHF: Gross short positions fell by 37% among large speculators and 33% among asset managers last week.
• USD/CAD: Large speculators were on the cusp of flipping to net-short Canadian dollar futures, while gross longs fell notably among asset managers.
• AUD/USD: Adjusted for open interest, the percent rank for Australian dollar futures points to a bullish sentiment extreme across the 3-month, 1-year, and 3-year timeframes among both groups.
• NZD/USD: Net-short exposure declined to a five-month low among both groups.

 

Asset Manager Positioning | COT Report

Source: CFTC (COT), LSEG

 

FX Futures Positioning | COT Report (IMM Data)

US Dollar Index (DXY) Futures Positioning | COT Report

Futures traders flipped to net-long US dollar exposure last week. Their $10.9 billion weekly increase marked the fastest rise since January 2019, lifting net-long exposure to a 15-week high of $5.4 billion.

Importantly, this still falls short of a sentiment extreme when viewed against the multi-year range.

Asset managers are now at their most bullish on the US dollar index in a year, while large speculators have reverted to net-long exposure after a questionable four-week stint in net-short territory.

However, the weekly US dollar index chart shows a bearish inside week that closed back below 100. I suspect this is a temporary setback within an otherwise firm bullish trend on the daily chart, with dips likely to remain attractive for a move towards 102.

Source: CFTC (COT), ICE, LSEG

 

 

 

 

 

EUR/USD Futures Positioning | COT Report

Long positions on the euro plunged while shorts accelerated last week among asset managers and large speculators. By Tuesday’s close, EUR/USD futures traders held just 21.1k net-long contracts — their least bullish level in just over a year.

Gross longs fell by 52.8k contracts (-20%), while shorts rose by 31.2k (+19%), suggesting bearish pressure is building despite the recent pullback.

Given this shift occurred before President Trump’s two-day warning to Iran to reopen the Strait of Hormuz, positioning may have already flipped to net-short exposure since.

Source: CFTC (COT), ICE, LSEG

 

 

USD/JPY Futures Positioning | COT Report

The bullish case for the Japanese yen continues to unravel, with its safe-haven appeal largely ignored. Asset managers flipped to net-short exposure for the first time in over a year last week, while net-short exposure among large speculators rose to a 20-month high.

Long positions also continued to trend lower across both groups, reinforcing the shift in sentiment against the yen.

Source: CFTC (COT), ICE, LSEG

 

 

USD/CHF Futures Positioning | COT Report

Short bets against the Swiss franc saw a record outflow last week, with asset managers cutting gross shorts by around 20k contracts (-33%). With gross longs little changed, this drove a sharp reduction in net-short exposure at a record weekly pace.

This suggests real money accounts were reducing downside exposure to the franc, likely as part of a broader move to cut risk and raise cash during a more volatile macro backdrop.

There was also clear evidence of deleveraging among large speculators. Net-short exposure nearly halved as longs fell by 3.9k (-32%) and shorts dropped by 19.8k (-37%).

Source: CFTC (COT), ICE, LSEG

 

 

AUD/USD, USD/CAD, NZD/USD Futures Positioning | COT Report

Australian dollar futures

We’re seeing a divergence among the major commodity currencies in terms of positioning. Net-long exposure in Australian dollar futures has continued to rise, with asset managers pushing theirs to a record high and large speculators reaching a nine-year high.

However, with the percent rank at 100% across the 3-month, 1-year and 3-year timeframes for both groups — and prices now pulling back — a sentiment extreme may already be in place.

 

 

 

 

Canadian dollar futures

Meanwhile, large speculators were on the cusp of flipping to net-short exposure on CAD futures, while asset managers reduced their net-long exposure by more than 50%.

The move appears to be driven primarily by a sharp closure of longs rather than a build-up of shorts, suggesting it may reflect caution around oil prices and Middle East tensions, rather than a firm shift towards expectations of further BoC rate cuts.

 

New Zealand dollar futures

At the other end of the spectrum, net-short exposure to New Zealand dollar futures has continued to decline. Large speculators and asset managers have reduced net-short positions to a six-month low of around -22k contracts.

Traders appear increasingly convinced that the RBNZ’s cutting cycle is over, although expectations for rate hikes remain limited.

Source: CFTC (COT), ICE, LSEG

 

 

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge