USD/JPY Slightly Softer in Subdued Trading, Look Forward to NFP
Trading is relatively subdued in Asian session today with most major pairs and crosses staying inside Friday's range. Some additional pressure is seen in USD/JPY but loss is so far limited. Markets seemed to have well digested Fed Chair Jerome Powell's balanced message on tapering already. Attention will turn...
CFTC Commitments of Traders – Risk Currencies Got Dumped. Reversal Likely in Coming Week
As suggested in the CFTC Commitments of Traders report in the week ended August 24, NET SHORT of USD index futures gained +1 151 contracts to 20 362. Speculative long positions added +1 151 with no change in shorts. European currencies got dumped in the reporting weeks on resurgence...
CFTC Commitments of Traders – Precious Metals Remained Firm while Crude Oil Rebounded after Sharp Fall
According to the CFTC Commitments of Traders report for the week ended August 24, NET LENGTH for crude oil futures plunged -30 011 contracts to 374 312 for the week. Speculative long position declined -10 078 contracts, while shorts jumped +19 933 contracts. The rebound of crude oil prices...
Stocks at New Record, Dollar Plummeted, Aussie Turning Around
Fed Chair Jerome Powell's speech at the Jackson Hole Symposium didn't disappoint. He did what the markets expected, affirming the openness for beginning tapering this year, without indicating the need for an imminent start. Just as Philadelphia Fed President Patrick Harker described, Powell laid out where the center of...
Explaining JPY’s Resilience Amidst Fed’s Taper Talks
Japanese yen has been rather stable over the past weeks despite volatility in other major currencies. It's resilient performance over the past few days despite heightened FOMC tapering talks is no accident. We summarize three major drivers of this.
Funding Currency Firms on Risk Aversion
A key theme of USD’s strength...
Powell More Upbeat about Job Market and Inflation, Stopped Short of Hinting about the Timing of Tapering
The closely-awaited Jackson Hole speech by Fed chair Powell reaffirmed that QE tapering would begin later this year. While being more upbeat about the progress of employment and inflation, Powell warned of the downside risks posed by the rapid spread of the delta variant. He also attempted to de-link...
Markets Treading Water Despite Strong PCE Inflation, Powell Next
The overall markets continue to tread water in early US session. Two Fed officials expressed their support for tapering, but investors are probably still waiting for Chair Jerome Powell's Jackson Hole speech to take action. There is also little reaction to stronger than expected PCE inflation data. Commodity currencies...
Markets Mixed as More Fed Comments Awaited, Sterling Softens
Overall markets continue to trade in a mixed manner for now. Yen and Dollar are currently the weakest for the weak while commodity currencies are the strongest. But all major pairs and crosses are stuck inside prior week's range. The situation in Afghanistan is unlikely to be a persistent...
Swiss Franc Falls Broadly While Euro Firms Up, Dollar Cautious
Swiss Franc drops sharply today, as pressured by selling against Euro, and rising treasury yields. Dollar once again tries to recover, but there is no committed buying yet. The greenback traders will carefully scrutinize the comments from Fed officials coming out today and tomorrow, as the annual Jackson Hole...
Yen Falls on Rising US Yields, Dollar Soft Again
Another round of selling was seen in Dollar overnight, as US stocks extended record run. But Yen was even weaker, following the strong rally in treasury yields. It remains to be seen if investors are already starting to position themselves for the Jackson Hole symposium. For now, Yen, Dollar,...
Dollar Continues to Recover after Durable Goods Orders, Markets Mixed
Dollar continues to pare back some of this week's losses in early US session, after slightly better than expected durable goods orders. But strength of recovery is so far relatively weak. Markets are also generally in mixed mode. Euro has litter reaction to worst than expected Germany business climate...
Dollar Recovers Mildly as Selling Slows, Traders Turning Cautious
Dollar recovers mildly in Asian session today as selling lost some momentum. On the other hand commodity currencies are turning softer. Australian Dollar continues to be weighed down by surging coronavirus cases, as the State Premier also warned of "lots of pressures" on hospitals. But overall, traders are starting...
Loonie’s Outlook Remains Hinged on Crude Oil Price
Commodity currencies suffered last week but Canadian dollar was the worst performer. Loonie declined -2.93% in the past week, making it the weakest amongst major currency pairs. Other than the broad-based strength in US dollar amidst speculations of early taper by the Fed, the sharp selloff in crude oil...
NZD Rises on Hawkish RBNZ Comments, Euro and Dollar Soft
New Zealand Dollar rises broadly today after a top RBNZ official indicated that the decision to refrain from rate hike was mainly due to communication difficulty. Instead, the central bank is actively considering a 50bps hike. Strong rebound in Asian stocks also supported other commodity currencies, but positive sentiment...
Markets Back on Risk-on Mode, Dollar Selling Slows Slightly
Following another record close in US overnight, Asian markets open generally higher and stay firm. Commodity currencies continue to extend this week's rebound. While Yen and Swiss Franc remain soft, Dollar pull back seems to be slowing slightly. Nevertheless, Dollar selling could come back any time if Gold could...
Dollar Extending Pull Back, Gold Upside Breakout
Markets continue to reverse some of last week's move, as seen in the rebound in European and Asian equities. Dollar, Yen and Swiss Franc all turned weaker while commodity currencies strengthened. PMIs from Eurozone and UK are all solid, despite mild pull back. Yet, both are outshone by commodity...
Jackson Hole Symposium Preview: Affirming Likelihood of Taper Announcement in November while Striking Balance between Strong Data and Pandemic Resurgence
Following the FOMC minutes, the attention turns to the Jackson Hole symposium later this week. We expect that the Fed would make formal announcement of QE tapering at the November meeting. With a tapering size of US15B at each meeting, the entire QE program would be complete by September...
Dollar Paring Gains as Asian Markets Rebound Despite Poor PMIs
Asian markets are staging a strong rebound today, despite poor economic data out of Japan and Australia. Investors are probably reassessing the timing of Fed's tapering, which would be delayed by the current surge in Delta variant. Meanwhile, China reported zero case of local transmission of COVID-19 for the...
CFTC Commitments of Traders – Risk Currencies Got Dumped on Hopes of Fed’s Tapering and Resurgence of Pandemic
As suggested in the CFTC Commitments of Traders report in the week ended August 17, NET SHORT of USD index futures dropped -115 contracts to 19 211. Speculative long positions slipped -515 contracts while shorts decreased -400 contracts. Concerning European currencies, NET LENGTH in EUR futures jumped +23 783...
CFTC Commitments of Traders – Risk Aversion Trumped Oil, Lifted Precious Metals
Trader trimmed bets on crude oil futures as the outlook has become more uncertain amidst rising coronavirus cases and Fed's tapering in the near future. According to the CFTC Commitments of Traders report for the week ended August 17. NET LENGTH for crude oil futures added +3 910 contracts...