Commitment of Traders (COT): Rise in USD Longs, Cutback in CAD Longs

The CFTC has released its latest Commitment of Traders report, for the week ended September 24. This report shows some significant changes on some of the pairs, especially the Canadian Dollar which has seen a reduction in the net long positions. Net longs on the CAD are only a quarter of what it was, reducing from 20K to 5K. This is not totally unexpected as oil prices cool off on restoration of Saudi oil production.

Speculators continue to drive longs on the USD, mostly because of the less-than-dovish stance in the rate statement by US Fed Chair Powell, as well as a further division in the FOMC on future monetary policy. Positive sentiment around the US-China trade impasse, driven by the optimism around the upcoming meeting, also helped drive USD longs.

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Net shorts on the GBP declined to the lowest levels in 2 months as the UK Supreme Court voided the prorogation of the UK Parliament, raising hopes for a soft Brexit.

A decline in safe haven conditions led to the receding of JPY longs. Despite the fact that speculators are still net long on the JPY, optimism on the trade talks between US and China weighed on risk-off sentiment. The same conditions have also led to a doubling of the CHF net short positions.

There was also an increase in net short positions on the NZD, mirroring the dovish stance of the RBNZ amid declining economic conditions in New Zealand.

AUD shorts also fell by one-sixth, though the RBA rate decision on Tuesday may alter the sentiment of Aussie Dollar speculators.

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