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$1.05
(+0.46%)
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$1.22
(+0.52%)
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$0.69
(-0.09%)
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$0.01
(+0.83%)
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$0.06
(+0.45%)
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$0.01
(+0.66%)
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$0.27
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FX COT Update: Biggest Bullish Bet on CAD Since Last Spring

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This data references the period ending Tuesday, 21st February.

EURUSD

Non-Commercials increased their net short positions in the Euro last week selling a further 11.5k contracts, to take the total position to -58k contracts. This adjustment marks a fresh resurgence in Euro selling interest as hawkish Fed rhetoric combines with reassurances on behalf of the ECB that they will not suddenly stop asset purchases. The release of the January FOMC meeting minutes last week confirmed that many policy markets noted that it might be appropriate to raise rates “fairly soon”. Although the minutes fell shortly of specifically pointing to a March date, Futures pricing still indicates a more than 30% chance of a hike in March.

This will be an important week for EURUSD with a raft of tier one data releases set to provide plenty of volatility.  Headline prints will be US 4Q GDP on Tuesday, German CPI on Wednesday and Eurozone CPI estimate for February on Thursday. Alongside these releases, we also have Fed Chair Yellen giving her economic outlook on Friday as well as US President Trump who will be speaking before Congress on Tuesday. Markets will be keen to hear the latest from the President as uncertainty continues to grow linked to Trump’s immigration policies and renegotiation of NAFTA.

GBPUSD

Non-Commercials increased their net short positions in Sterling last week selling a further 0.8k contracts to take the total position to -66k contracts. This marks the third consecutive week of sales in Sterling though momentum has dwindled.

While concerns regarding the upcoming Brexit negotiations continue to drive uncertainty, data still remains on a firm footing. 4Q GDP released last week showed that the UK economy expanded at 0.7%, a slightly quicker pace than the 0.6% advance seen over the third quarter. This week traders will be focusing on UK PMI data sets due over Thursday and Friday.

USDJPY

Non-Commercials reduced their net long positions in the Japanese Yen last week buying a further 1.2k contracts to take the total position to -50k contracts. Short positions continue to be steadily eroded in JPY as the USD pause continues. Divergent forces continue to shape JPY flows with widening yield differentials and surging global equities exerting downside pressure and uncertainty linked to Trump’s protectionist stance providing support. Focus this week will be on CPI due on Thursday.

USDCHF

Non-Commercials reduced their net short positions in the Swiss Franc last week buying a further 2.5k contracts to take the total position to -9k contracts. This marks the third straight week of buying in CHF which reflects growing demand for safe haven currencies as, despite still rising equities, the uncertainty linked to Trump and Eurozone political risk continues to build. This week traders will be focused on 4Q GDP due on Thursday.

AUDUSD

Non-Commercials Increased their net long positions in the Australian Dollar last week buying a further 9.3k contracts to take the total position to 33.5k contracts. AUD continues to be steadily bought as the currency continues to benefit from the strong commodity rally over the last year.

The latest corporate profit data for the country showed that profits reached record highs over 4Q GDP. RBA Governor Lowe noted last week that while AUD isn’t fundamentally overvalued he would still rather see it at a lower level.  A key focus this week will be on 4Q GDP due to be released on Wednesday followed by trade balance data on Thursday.

USDCAD

Non-Commercials increased their net long positions in the Canadian Dollar last week buying a further 5.2k contracts to take the total position to 25k contracts. Last week’s adjustment market the biggest bullish bet in CAD since last spring, however, despite the continued build in CAD longs, the price is failing to reflect buying interest with CAD remaining muted against USD.  One factor which might be keeping CAD subdued is Oil which still can’t manage to break higher.

Uncertainty linked to Trump’s proposed renegotiation of NAFTA is also exerting downside pressure on the Canadian currency. A key focus this week will be on the BOC who meet on Wednesday and are largely expected to keep rates unchanged, looking through inflation as being linked to the jump in Oil prices.

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