The report as of June 30 mainly shows the weakness of the yen, euro and pound against the dollar. However, it seems that the monthly dynamics are even more important. In the case of the euro, hedging funds increased short positions, causing their net position to fall by 56.7 thousand contracts compared to the end of May, the strongest such move since October 2016. This distinction allows a better assessment of where the move was most decisive and where this arrangement could be most quickly challenged.
Euro, which hedging funds dislike
In the euro, the most noticeable behavior is that of leveraged funds. At the beginning of June their net position was still negative by 22.3 thousand contracts, but due to increasing short positions by the end of the month it fell to minus 83 thousand contracts. In month‑to‑month terms this meant a net position decline of 56.7 thousand contracts, the strongest since October 2016. This shows that through June the market increasingly played for a weaker European currency against the dollar, which may have been related to the Fed’s hawkish stance in mid‑last month.
At the same time asset managers had not yet moved to a net short position, but raised their gross short position to 212.4 thousand contracts, the highest level in the entire history of this series. Such an arrangement can be considered a potentially important cautionary signal against the euro. It does not yet show a full capitulation of long capital, but clearly indicates that willingness to maintain a pure exposure to euro growth was decreasing in June.
Pound became a defensive position for asset managers
In the pound the picture was different from the euro. Hedge funds gradually reduced their confidence in long positions and by the end of June were almost net neutral, but did not build deep short positions. In contrast, in the asset manager group the gross short position rose to 166.8 thousand contracts and was the highest in the series history, while the net position fell to minus 154.6 thousand contracts, also a record low.
The monthly net decline in this group was 45.3 thousand contracts and was the strongest since July 2025. This would indicate that the pound today looks more like a currency against which large institutional capital has positioned itself very defensively, rather than a market driven by short‑term hedge fund speculation.
Yen remained the strongest channel for a stronger dollar
The most decisive reading of the COT report appeared in the yen. Leveraged funds finished June with a net position of minus 137.8 thousand contracts, and the gross short position rose to 208.3 thousand. This was the second highest result in the entire history of the TFF Combined series. The market was only higher in June 2007. In month‑to‑month terms, due to the increase in short positions, the net position fell by 51.6 thousand contracts, the strongest decline since July 2017.
It is the yen that most strongly shows that June positioning was set for a stronger dollar. In the background were higher U.S. yields, the spread in rates, and the risk that market vigilance alone would not be enough to permanently reverse the Japanese currency’s weakness.
The beginning of July immediately added a counterargument. Weaker U.S. labor market data briefly cooled sentiment toward the dollar, so June COT should not be treated as a closed decision, but it is worth remembering that money has already been put on the table.
At the same time a broader screening of the dollar basket shows that strong moves did not end with these three pairs. Asset managers recorded a record‑weak month also in the Australian dollar, and leveraged funds also moved strongly against the Canadian dollar. The most could now be seen in three aspects. The first test could be Fed minutes, the second the direction of U.S. yields, and the third whether USDJPY would maintain upward pressure with potential intervention.
