Speculators Reduce Bearish Dollar Bets in Latest Week; Positions in Gold and U.S. Treasury Bonds Shift
Data from the U.S. Commodity Futures Trading Commission (CFTC) revealed that speculators made significant shifts in their positions in various commodities and currencies during the week of January 16.
According to CFTC data, speculators reduced their net long positions in gold by 5,653 lots to 100,634 lots. In contrast, their net long positions in ICE Brent crude oil increased by 18,125 lots to 226,873 positions. Speculators also decreased their net long positions in NYMEX WTI crude oil by 20,969 positions to 90,160 positions.
However, the most notable change was in the U.S. dollar, where speculators reduced their bearish bets. The net short position in the U.S. dollar decreased from $12.7 billion to $9.799 billion, marking the largest level since August.
The shift in dollar speculative sentiment came after a series of generally solid U.S. economic data and recent comments from Federal Reserve officials that tempered expectations for a rate cut at the March policy meeting. Additionally, U.S. interest rate futures markets are now pricing in less than a 50% chance of a rate cut at the March meeting, down from 80% the previous week.
Furthermore, speculators also increased their net short position in U.S. 10-year Treasury futures to the largest amount on record. The net short position in U.S. 10-year Treasury futures was 889,385 lots, compared with 787,020 lots a week ago.
The changes in positions across various commodities and currencies reflect the evolving sentiment among investors and traders as economic conditions and central bank policies continue to influence market expectations. As investors navigate these changes, the market could see increased volatility and trading activity in the coming weeks.