Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Head of Commodity Strategy
Summary: Speculators cut bullish dollar bets to an 18-month low during the final week of 2019
Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.
Into yearend speculators continued the recent trend of US dollar selling. Our FX strategist John Hardy in his latest update asked whether the US dollar is finally rolling over in a more determined fashion following some weakness during December. The net-long against ten IMM currency futures and the Dollar Index dropped by 17% to $12.3 billion, an 18-month low. Selling was most noticeable against CHF, AUD and not least the JPY.
Apart from the dollar speculators finished 2019 holding long positions in MXN, RUB, CAD and GBP. The latter reaching the highest net long since 2018.
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