COT: Dollar short doubling despite general Greenback strength

This summary highlights futures positions and changes made by speculators such as hedge funds and CTA’s across forex, bonds and stocks up until last Tuesday, June 16. Appetite for risk temporarily received a knock amid worries around a re-acceleration of COVID-19 cases and continued uncertainty around the speed of the U.S. and the global recovery. The S&P 500 ended the reporting week down 2.4% while the yield on U.S. ten-year notes reversed lower to their established 0.6% to 0.8% range.

Speculators almost doubled bearish bets on the Greenback, this despite seeing the dollar rise by 0.7% against an index of currencies. The combined dollar short against ten IMM currency futures and the Dollar Index jumped by $8.4 billion to $16.8 billion, the highest since May 2018.  

The heavy selling was broad-based but with the bulk of the flow mostly benefiting the euro and Australian dollar. The euro net-long reached €14.6 billion, the highest since May 2018 while the Australian dollar’s 28% rally from the March low supported a further cut in the net short to 6.5 lots, also the lowest since May 2018. Despite the risk off theme driving markets during the week, the Mexican peso position managed to flip back to long and a 13-week high.