Strong dollar not emerging in positioning data – ING

The dollar’s appreciation in November still hasn’t emerged in CFTC FX positioning data that continues to show most G10 currencies’ net positions rising against USD, explains Francesco Pesole – FX Strategist at ING.

Key Quotes:

“November has so far been a month dominated by a strengthening of the dollar across the board, but this has however not translated into a rise in USD net positioning as reported by the CFTC. USD net aggregate positioning versus reported G10 currencies (i.e. G9 excluding NOK and SEK) 
was unchanged in the last weeks of October and the first week of November, and then inched lower (now at +9.8% of open interest) in the week ending 16 November.”

“The surprise increase in USD net shorts was largely due to the jump in JPY, CAD and AUD net longs, which more than offset the slight decrease in EUR net positioning and the drop in GBP net positioning.”

“It is not uncommon to see CFTC FX positioning lag the moves in the spot market, and we can reasonably expect an increase in USD net-longs across the board in the next CFTC COT report.”