The Dollar Bet: Speculators Are Short the Euro, the Pound and the Aussie at Once

Every Friday, the CFTC publishes how the largest traders are positioned in US futures. In the latest report, one theme runs through almost every currency: Speculators are buying the US dollar and selling most of the currencies it trades against.

The euro shows the move most clearly. A month ago, large speculators held a modest net short of about 43,000 contracts. By October 6, that short had more than doubled to 99,332 contracts, the largest bet against the euro since February 2020.

The more telling part is who is selling. Asset managers are the slow money in this market: pension funds and other large investors that hold positions for months. They have been net long the euro in every week since 2021, and they still are. Over the past four weeks, however, they added about 76,000 short contracts, and hedge funds added more than 50,000 of their own.

The Euro Is Not Alone

If the move were only about Europe, the other currencies would hold steady. They do not. Speculators cut their pound longs by more than a third in four weeks. Their net short in the Australian dollar nearly tripled, and the New Zealand dollar turned to a net short in late September.

These are not four separate trades but one trade placed four times: long the US dollar.

Only the Japanese yen and the Swiss franc move the other way. Speculators have been buying both, and both are the market’s classic safe havens.

The small ICE Dollar Index future is the one exception, because speculators trimmed their long there. That market is a fraction of the size of the currency futures, so it carries less weight in this picture.

The Peso Falls Out of Favor

The largest single shift of the week came from Mexico. For a year, the peso was one of the speculators’ favorite trades. It pays a high interest rate, so a long position earns income while it is held. Over the past twelve months, their net long never fell below 54,000 contracts.

In four weeks, they sold almost all of it. The net long is down to 10,701 contracts, and the COT Index fell 29 points in a single week. The Brazilian real, another favorite carry trade, shows an earlier stage of the same move. Speculators are still long there, but their shorts have more than doubled.

What 2020 Can and Cannot Tell Us

A crowded trade is not a signal that it is about to reverse. Positioning can stay one-sided for weeks and sometimes for months. The COT Index shows how stretched a trade is, but not when it ends.

The last comparable episode is still instructive. In February 2020, speculators held a euro short of 114,021 contracts, slightly larger than today’s. Six months later, they were net long 211,752 contracts, the largest long since euro futures began trading in 1999. One example does not make a rule, but it shows how quickly a crowded position can reverse once the story behind it changes.

What to Watch Next

• Asset managers. The key question is whether they keep adding euro shorts.
• The yen and the franc. They are the only currencies that speculators are buying. If that changes, the dollar trade becomes even broader.
• The peso. Another week like this one would turn the position net short.

The euro market page in COT Screener is free and shows how this short built up, week by week.

Source: CFTC Commitments of Traders, futures only, positions as of Tuesday, October 6, 2026. Large speculators come from the Legacy report, asset managers and hedge funds from the TFF report.