Mon, Nov 30, 2020 @ 16:36 GMT
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Only USD and EUR Maintained Net Length Positions amidst Monetary Policy Divergence

As suggested in the CFTC Commitments of Traders report in the week ended July 24, bets on a higher US dollar increased modestly by +1 818 contracts. However, thanks to a -4 529 reduction in short positions, NET LENGTH for USD Index (DXY) futures added +6 347 contracts to 25 271 during the week. This marks the highest level since mid- 2017. While the index fell across the board during the week, the outlook remains positive as exceptionally strong US GDP growth heightened rate hike hopes.

For European currencies, NET LENGTH for EUR futures gained +8 233 contracts to 29 640 for the week. Bulls increase their bets, by + 2125 contracts, to 179 515, while bears decreased bets, by -6 108 contracts, to 149 875, for the week. GBP futures deepened into NET SHORT position, adding +7 991 contracts to 46 743. Although BOE is poised to increase the policy rate for a second time in a decade in August, the market remained worried about Brexit negotiations. Meanwhile, traders were relatively content with Eurozone’s economic outlook and expected ECB to implement tapering according to schedule.

On safe-haven currencies. Net SHORT for CHF futures rose +3 665  contracts to 45 808, while that for JPY futures soared +15 119 contracts to 73 769 during the week.

All commodity currencies stayed in NET SHORT positions. NET SHORT for AUD futures added +4 961 contracts to 45 486, while that for NZD futures slipped -697 contracts to 24 370. NET SHORT for CAD futures fell -2 973 contracts to 44 511. While AUD and NZD weakened against USD, CAD climbed over +1% against the greenback during the week.

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