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US Dollar Bulls Reduced, EUR/USD Shorts Cut, CAD Longs Extended – COT Report

COT Report – USD, GBP, CAD & EUR Analysis

  • Investors Reduce US Dollar Long Exposure
  • EUR/USD Bearish Bets Smallest Since September 2019
  • GBP & CAD Bulls Extended

The Predictive Power of the COT Report

How to Read the CFTC Report

Source: CFTC, DailyFX (Covers up to January 14th, released January 17th)

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US Dollar Bulls Reduced, EUR/USD Shorts Cut, CAD Bulls Extended – COT Report

Investors have continued to reduce their exposure to the US Dollar, cutting net longs by a sizeable $2.5bln against G10 currencies to $6.66bln, which in turn has seen GBP and CAD remain in demand.

Across the safe-haven currencies, the Japanese Yen was out of favour with speculators taking up fresh shorts within the currency, which saw bearish bets rise sharply by $2.1bln. Positioning in the Swiss Franc is flat after net shorts were reduced by $550mln.

As data in the Eurozone begins to stabilise, the Euro has seen yet another sizeable reduction in net shorts by $1.9bln to $6.7bln (smallest bearish bet since September 2019). However, given that investors have failed to add fresh longs, the currency has struggled on the upside. Elsewhere, investors remain undeterred by the increase in easing bets for the Bank of England, with GBP net longs rising another $1.2bln as investors covered their shorts.

Commodity currencies were in demand as Canadian Dollar bullish bets were extended to $2.5bln, marking a third consecutive rise in net longs. Net shorts in the Australian Dollar were cut by $450mln, however, sentiment remains bearish with focus firmly on the pivotal Australian jobs and inflation data, ahead of the RBA rate decision.

US Dollar

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

For a more in-depth analysis on FX, check out the FX Forecast

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX