USD bulls lost ground as the greenback corrected from its peak. As suggested in the CFTC Commitments of Traders report in the week ended September 25, NET LENGTH of USD index dropped -447 contracts to 37 009 contracts. Both speculative long and short positions decreased. During the week, the DXY index slipped -0.54%. The greenback dropped against all major currencies with the exception of safe- haven assets, namely Japanese yen (JPY) and Swiss franc (CHF).

NET LENGTH for EUR futures gained +2 030 contracts to 3 696. Meanwhile, NET SHORT for GBP futures decreased -12 180 contracts to 67 078. Deadlock of Brexit negotiations remained unresolved as the deadline approaches. The market this week focuses on Conservative Party’s conference in which the members of the ruling party should reveal their (updated?) stance on thorny issues including Irish border and future trader relations with the EU.

On safe-haven currencies, Net SHORT for CHF futures dropped -2 355 contracts to 16 083 while that for JPY futures deepened, by 20 964 contracts, to 84 719 during the week. This was driven by the decline in speculative long positions (-2 499 contracts) and a jump in shorts (+18 465 contracts).

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All commodity currencies stayed in NET SHORT positions. NET SHORT for AUD futures rose +4 058 contracts to 72 061, while that for NZD futures dropped +154 contracts to 31 835. NET SHORT for CAD futures declined -10 579 contracts to 19 532. Further fall in CAD shorts is expected for the coming week as Canada and the US eventually reached a preliminary trade deal to replace NAFTA.


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