FX futures positioning reveals a shifting landscape for the US dollar, yen and Canadian dollar, with notable changes across large speculators and asset managers. The latest COT report highlights falling USD exposure, a sharp unwind of yen shorts following suspected intervention, and a potential turning point for CAD positioning.
While the US dollar index remains under pressure, positioning suggests downside may be limited. At the same time, traders are reassessing bullish bets on USD/CAD and reducing bearish exposure to the yen, offering fresh clues for near-term FX direction.
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COT Report Analysis: USD Index, USD/JPY and USD/CAD Futures Positioning
Large Speculator Positioning from the COT report
Source: CFTC (COT), CME, ICE, LSEG
- US Dollar: Aggregate futures exposure fell by $4.7 billion last week to $6.2 billion.
- EUR/USD: Net-long euro positions dropped by 9k contracts among large speculators and asset managers, driven by increased shorting.
- GBP/USD: Net shorts rose by 12k contracts across both groups, as shorts increased and longs were trimmed.
- USD/JPY: Suspected MoF intervention prompted traders to cut net-short yen exposure by 56.3k contracts.
- USD/CHF: Gross longs on the Swiss franc climbed 12.7k contracts, while shorts remained broadly unchanged.
- USD/CAD: Stronger demand for longs reduced net-exposure to Canadian dollar futures by 37.6k contracts.
- AUD/USD: Large speculators lifted net longs by 6.8k contracts, nearing a 13-year high.
- NZD/USD: Asset managers nudged net shorts to a 15-week high, rising by 1.5k contracts.
Asset Manager Positioning | COT Report
Source: CFTC (COT), CME, ICE, LSEG
FX Futures Positioning | COT Report (IMM Data)
US Dollar Index (DXY) Futures Positioning | COT Report
The US dollar is down around -3% from its late March high, with the market repeatedly failing to hold materially above 100 since November. It has closed lower in five of the past six weeks, although bearish momentum appears to be waning. With the US and Iran no closer to a deal, USD downside potential may be limited while upside pressures begin to build.
Aggregate exposure to the USD via futures fell by $4.7 billion to $6.2 billion last week. However, it remains elevated relative to its February trough and not far below its April high. From that perspective, the US dollar index could appear oversold relative to aggregate positioning.
Moreover, net-long exposure among asset managers rose by 2.6k contracts to 10.8k contracts, and they have remained net-long since early March. Given this group tends to be several steps ahead of large speculators, I am inclined to overlook the fact that the latter were close to flipping to net-short exposure last week.
Source: ICE, CFTC (COT), LSEG
USD/JPY Futures Positioning | COT Report
The surge of bearish volatility on the Japanese yen stemming from suspected MOF intervention shook bearish bets out of their positions. Large speculators culled -37.8k gross-shorts – their fastest weekly drop since August 2024. The fact that longs only rose by 2.5k shows an air of caution on volatile times. Asset managers reduced their gross-short exposure by -13.3k contracts – their fastest weekly pace since December 2024. Again, longs were only up slightly by 2.6k contracts.
I noted in my intervention-analysis reports that previous rounds from the MOF have generally coincided with multi-month tops on USD/JPY and double-digit declined in percentage terms. That keeps USD/JPY in my ‘fade into rallies’ watchlist for now.
Source: CME, CFTC (COT), LSEG
USD/CAD Futures Positioning | COT Report
A 23.8k reduction in net-short exposure among large speculators marked the fastest weekly shift in 14 weeks, leaving net shorts at just -14.7k contracts. However, weak Canadian employment data on Friday and broader CAD weakness suggest this may have been a poorly timed move by speculators.
Moreover, asset managers may also be questioning their decision to increase net-long exposure by 13.8k contracts, lifting positions to a six-week high of 20.8k contracts.
With USD/CAD snapping a four-week losing streak and Canadian dollar futures hinting at a potential swing high on the weekly chart, we could see a reversal of bullish bets in the week ahead.
CFTC COT report chart showing USD/CAD futures positioning, with falling net shorts among large speculators and rising asset manager longs as prices hint at a potential reversal
Source: CME, CFTC (COT), LSEG
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-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
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