Hedge Funds Doubled Their Euro Short as Asset Managers Cut
Key takeaways
- The euro fell from 1.1614 to 1.1188 dollars between 8 September and 13 October 2026 on the ECB reference rate, a drop of about 3.7%.
- In those five weeks, Leveraged Funds (hedge funds and CTAs) doubled their euro net short, from 46,381 to 92,833 contracts.
- Their gross shorts reached 185,745 contracts, the most since March 2020.
- Asset managers, the euro's biggest long holders, cut their net long by 26% to 214,007, the lowest since February 2025 and less than half of their February 2026 peak.
- The hedge fund COT Index is 0.1: the net short is at the bottom of its three-year range. Both central banks meet in the last week of October.
The Short Answer
The euro is falling because both types of big money in euro futures are turning against it at the same time. Hedge funds are adding shorts, and the long-term asset managers who have backed the euro all year are selling. The Federal Reserve's rate hike on 16 September gave the dollar the edge, and the weekly COT report shows positioning moving fast to match.
This note puts numbers on it, using the CFTC Traders in Financial Futures report for CME euro FX, futures and options combined, through the report dated Tuesday 13 October 2026.
What the Euro COT Report Shows This Week
Leveraged Funds positions in CME euro FX:
| Report date | Funds long | Funds short | Contracts long | Contracts short | Net position |
|---|---|---|---|---|---|
| 8 September 2026 | 41 | 53 | 81,335 | 127,716 | -46,381 |
| 15 September 2026 | 43 | 55 | 84,559 | 135,914 | -51,355 |
| 22 September 2026 | 47 | 53 | 86,745 | 145,550 | -58,805 |
| 29 September 2026 | 47 | 56 | 87,616 | 170,061 | -82,445 |
| 6 October 2026 | 52 | 61 | 93,645 | 178,420 | -84,775 |
| 13 October 2026 | 53 | 58 | 92,912 | 185,745 | -92,833 |
Three things stand out.
The net short doubled in five weeks. It went from 46,381 contracts to 92,833. That matches the most bearish reading of the past three years, 92,930 on 28 July, to within about a hundred contracts.
This is new short selling. Gross shorts rose by 58,029 contracts, or 45%, to 185,745. That is the largest hedge fund short in euro futures since 3 March 2020. The single biggest week was the report of 29 September, when shorts jumped by about 24,500 contracts in seven days, two weeks after the Fed hiked.
The fund count shows a two-way market. More funds are on both sides: longs rose from 41 to 53 traders and shorts from 53 to 58. The short side is where the size is. Gross shorts are twice gross longs.
Asset Managers Are Leaving Too
Leveraged funds trade the euro short term. Asset managers (pension funds, mutual funds, insurers) hold longer positions and have been the euro's main buyers. They are now selling.
| Group | Net position, early September | Net position, 13 October | Change |
|---|---|---|---|
| Leveraged Funds | -46,381 (8 Sep) | -92,833 | Short doubled |
| Asset Managers | +291,129 (1 Sep) | +214,007 | Long cut 26% |
| Asset Managers, 2026 peak | +436,947 (17 Feb) | +214,007 | Less than half |
This is what makes the current move different from an ordinary hedge fund trade. When only the fast money is short, a turn in the data can flip it within weeks; our yen note showed exactly that kind of reversal. When asset managers are cutting at the same time, the selling comes from both the short-term and the long-term side of the market.
Read the two together and the picture is clear: the euro's biggest buyers are stepping back while its biggest sellers press harder. COTInsight shows every participant group side by side for each market, so you see this split in one panel rather than across two reports.
How Extreme Is the Euro Short?
| Measure | 13 October 2026 | What it means |
|---|---|---|
| Leveraged Funds net | -92,833 | Equal to the 3-year low |
| Z-score (52 weeks) | -1.76 | Well below the one-year average |
| COT Index (3 years) | 0.1 | Bottom of the 3-year range |
| Gross shorts | 185,745 | Most since March 2020 |
| Percentile since 2006 | 15th | Not yet at the 2015 record |
| Record net short | -175,046 (24 March 2015) | Today is about half of it |
On a three-year view the euro short is as stretched as it gets: the COT Index is at the floor. On the full history since 2006 there is still room, because the 2015 short, when the ECB launched quantitative easing, was nearly twice today's. Our z-score guide and COT Index guide show how the two readings are built and why we show both.
The Backdrop: Two Central Banks in One Week
The Federal Reserve raised its target range to 3.75% to 4.00% on 16 September, its first hike since 2023. The euro has been under pressure since. The ECB reference rate fell from 1.1537 on 16 September to a low of 1.1177 on 7 October and was 1.1234 on 21 October.
Both central banks meet in the final week of October: the Fed on 27 and 28 October and the ECB on 28 and 29 October. With hedge funds at a three-year extreme and asset managers already cutting, those two meetings decide whether the euro short gets more crowded or starts to unwind.
The euro is one leg of a wider dollar story. Our dollar note from July showed how crowded the anti-dollar trade had become. Today leveraged funds are also net short the Swiss franc and the Canadian dollar. COTInsight's VS comparison mode (Ultimate) puts two currencies side by side, so you can see whether the move is euro-specific or a broad dollar bid.
What to Watch in the Next Reports
- Gross shorts. 185,745 is a five-and-a-half-year high. Further growth means the trade is still drawing new sellers. A drop means profit-taking has started.
- Asset manager longs. A further cut below 200,000 would put them at their lowest since early 2025. A rebound would be the first sign of long-term buyers returning.
- The central bank week. A hawkish ECB on 29 October could squeeze a short this size. A second Fed hike signal would feed it.
- The short trader count. 58 funds short, down from 61 a week earlier. A falling count with a steady short would mean the position is concentrating in fewer hands.
The next COT report, with positions as of Tuesday 20 October, is released on Friday 23 October at 3:30 PM Eastern.
How COTInsight Tracks This Every Week
Putting leveraged funds and asset managers next to each other in raw CFTC tables, then scoring them against their history, takes real work every Friday. COTInsight does it the moment the report lands.
- Free and Pro show the euro's net position, z-score, COT Index and regime every week. Pro adds 10 years of weekly history and CSV export, so you can line up today's short against 2015 or 2020.
- Ultimate adds every participant group and trader counts, which is how you see asset managers cutting while hedge funds press the short, plus the full archive back to 2006, PDF reports, weekly AI commentary, VS comparison and the REST API.
- The Historical Outcome Analyzer (Ultimate) shows what the euro did 4, 8 and 12 weeks after every past reading like this one, in the euro's own history. We tested that approach on 46 futures markets: tendencies picked on the first half of each market's history and scored only on the second half pointed the right way 56.1% of the time at 8 weeks, against a normal rate of 50.7%. The full test is in our guide to trading the COT report.
- The COTInsight TradingView indicator (Ultimate) plots the COT Index, z-score and regime right under your EUR/USD chart, so the three-year extreme is visible next to price.
See pricing or open the dashboard. New to currency positioning? Start with our COT guide for forex traders.
Frequently Asked Questions
Why is the euro falling in October 2026?
The Federal Reserve raised rates on 16 September, its first hike since 2023, and positioning has swung against the euro since. Leveraged funds doubled their euro net short in five weeks to 92,833 contracts, and asset managers cut their net long by 26%. The ECB reference rate fell from 1.1614 on 8 September to 1.1188 on 13 October.
Are hedge funds short the euro?
Yes. Leveraged Funds were net short 92,833 CME euro contracts on 13 October 2026, equal to their most bearish reading in three years. Their gross shorts of 185,745 contracts are the most since March 2020.
What are asset managers doing in the euro?
Selling. Asset managers are still net long 214,007 contracts, but that is down 26% since 1 September, the lowest since February 2025 and less than half of their 17 February 2026 peak of 436,947.
Is the euro short crowded?
On a three-year view, yes. The COT Index is 0.1 and the z-score is -1.76. On the full history since 2006 the short is at the 15th percentile, about half the 2015 record of 175,046 contracts.
What does the euro COT report show this week?
On the report for Tuesday 13 October 2026, Leveraged Funds held 92,912 long and 185,745 short CME euro FX contracts, a net short of 92,833, with 53 funds long and 58 short. The next report, for 20 October, is released on Friday 23 October.
Where can I see euro COT data every week?
COTInsight scores the euro's positioning every Friday, with z-score, COT Index, regime, every participant group and outcome history. The EUR/USD market page has an overview, and the full readings are in the dashboard.
Summary
The euro is being sold from both ends. Between 8 September and 13 October 2026, Leveraged Funds doubled their CME euro net short to 92,833 contracts, with gross shorts the biggest since March 2020, while asset managers cut their net long by 26%. The hedge fund COT Index sits at 0.1, the bottom of its three-year range, just as the Fed and the ECB both meet in the last week of October. Those meetings will show whether the euro short has further to run or is about to be squeezed.
Data: CFTC Commitments of Traders, Traders in Financial Futures report, futures and options combined, CME euro FX, through 13 October 2026. Exchange rates are ECB euro reference rates. Past results do not guarantee future results. Not investment advice.