US dollar

Outlook
Bullish
DAILY UPDATEThe US dollar is currently trading near its recent highs. The buck is flat against the euro and the British pound, while trading slightly lower against the Australian dollar and the Canadian dollar. Last week, the US dollar index (a measure of the currency against its largest peers), surged following the latest European Central Bank meeting. Today's trading range for the US dollar index is 94.20 - 95.10.  Turning to recent developments, the US imposed tariffs targeting Chinese imports totaling $34b a year last Friday. In April, the Trump administration unveiled potential tariffs on a list of 1,300 Chinese products worth $50 a year. The list has since been curtailed to 818 items. Most U...

Euro

Outlook
Bearish
DAILY UPDATEThe euro is slightly weaker against all major currencies today. The euro is currently the weakest against the Japanese yen. Last week, the currency fell sharply after the European Central Bank failed to meet the market's expectations regarding future monetary policy. Today's EUR/USD trading range is 1.1510 - 1.1680.  The euro continues to sell off following last week's ECB event. While the Bank was expected to signal a more significant tightening in future monetary policy, it chose to partially end its quantitative easing program and suggested that further changes would depend on future economic data. It also suggested that any rate hikes would only take place in the summer of 2019. Ec...

British pound

Outlook
Bearish
DAILY UPDATEPound sterling is currently selling off against all major currencies except the euro. Last week, the pound sold off sharply against the US dollar but ended the week higher against the euro. Thanks to an ongoing slowdown and limited expectations for tighter monetary policy, European currencies remain broadly out of favor. Today's GBP/USD trading range is 1.3210 - 1.3350. Last Friday, the pair found buyers just above the low end of our indicated trading range.  Turning to news, the Brexit negotiation process remains in focus. The EU Withdrawal Bill (i.e. the Brexit bill) returns to Parliament this week. Pro-remain Conservatives have stated that they will not back down regarding how much ...

Japanese yen

Outlook
Bearish
DAILY UPDATEThe Japanese yen is stronger against most major currencies today. The yen is currently the strongest against the British pound and the euro. Last week, the yen weakened against the US dollar thanks to broad dollar strength. Today's USD/JPY trading range is 109.60 - 111.20.  Following escalating US-China trade tensions, which we described in greater detail in our US dollar daily update, risk appetite is falling today. This is particularly true across Asian financial markets. Major Asian equity markets, such as Hong Kong's Hang Seng Index and Singapore's Straits Times Index, are both falling today. Given the yen's safe haven qualities, the currency is strengthening as traders exit riskie...

Australian dollar

Outlook
Bearish
DAILY UPDATEThe Australian dollar is slightly higher against all major currencies except the Japanese yen and the Canadian dollar today. Last week, the Australian dollar fell sharply against the US dollar thanks to rising US-China trade tensions and broad dollar strength. Today's AUD/USD trading range is 0.7410 - 0.7550. As AUD/USD approaches the bottom of our trading range, we recommend taking profits for those who are short the currency pair.   While Asian financial markets are mostly weaker today, reactions in the Australian dollar are limited. Both Hong Kong's Hang Seng Index and Singapore's Straits Times Index are currently lower. The offshore Chinese yuan (CNH) is also selling off today. Giv...

Canadian dollar

Outlook
Bearish
DAILY UPDATEThe Canadian dollar is strengthening against all major currencies today. The loonie is currently the strongest against the British pound and the euro. Last week, the Canadian dollar sold off sharply against the US dollar. In addition, USD/CAD traded above the top-end of our trading range. Today's trading range for the pair is 1.2980 - 1.3210. After moving higher, the loonie is no longer looking oversold.   While the US dollar index (a measure of the currency against its largest peers) is slightly higher today, the Canadian dollar is strengthening against the US dollar. A few minutes ago, Bloomberg reported that OPEC is looking to boost crude oil supply by 300k - 600k barrels per day. T...

Gold

Outlook
Bearish
DAILY UPDATEGold prices are currently stable. Last week, gold fell below the bottom end of our trading range ($1,280). While immediate reactions in the precious metal following last week's numerous central bank events were fairly limited, gold prices crashed last Friday. Looking at bonds, US Treasury yields are falling despite an acceleration in inflation and hawkish guidance from the Federal Reserve. All else held equal, gold prices tend to strengthen as bond yields move lower. Instead of bond yields, the bigger driver behind gold is recent strength in the US dollar. Today's gold trading range is $1,276 - $1,292.  Gold prices are currently flat. Looking at bonds, US 10-year Treasury yields are al...

Crude oil

Outlook
Neutral
DAILY UPDATECrude oil prices are mixed today. WTI is currently slightly lower while Brent crude is trading sideways. Last week, crude oil prices fell below the low end of our trading range. Between rising trade tensions, concerns regarding increasing OPEC supply and falling demand from China (the world's #1 importer), the commodity had plenty of reasons to trade lower. Today's WTI trading range is $63.60 - $68.30.  Turning to recent developments, China has threatened to impose tariffs on US crude oil imports. According to a report in the South China Morning Post, the country may implement tariffs targeting $16b a year worth of US coal and oil imports at some point in the future. Following the late...

Looking at this week’s Commitments of Traders Report, there are relatively few changes in net speculator positions across major currencies and commodities. The biggest change in positions can be seen in the Japanese yen, where speculators continue to flip-flop. As we wrote in last week’s edition of this report, traders remain undecided regarding the future direction of the yen.

Published 

Changes in positions are relatively limited in this week’s Commitments of Traders Report. The biggest changes in speculator net positions can be seen in the Japanese yen and the Swiss franc. Speculators have reduced their net short positions in both currencies this week. Changes in other major currencies and commodities are fairly limited. Looking at extremes in speculator positioning, the Swiss…

Published 

Looking at this week’s Commitments of Traders Report, speculators continue to decrease their bets in currencies and commodities inversely correlated to the US dollar. The biggest changes in positions this week can be seen in the Swiss franc, Japanese yen, Canadian dollar and gold. Speculators dumped safe havens (including the franc and the yen), while adding to positions in gold and the Canadian …

Published 

Looking at this week’s Commitments of Traders Report, speculators remain long currencies that are depreciating against the US dollar. This is particularly true for euro speculators. The biggest changes in speculator positions this week can be seen in the US dollar index and the Japanese yen. While net positions in the yen flipped to positive last week, they are once again negative this week.

Published 

In this week’s Commitments of Trader’s Report, speculators continue to sell assets inversely correlated to the US dollar. The biggest changes can be seen in falling speculator net positions in the Australian dollar, the Swiss franc, and gold. Net positions in other assets inversely correlated to the dollar including the euro, the British pound, the Canadian dollar and crude oil are also lower thi…

Published 

In our last take on the outlook for gold, we wrote that the combination of slowing growth outside the United States and rising inflation meant more weakness lay in store for the precious metal. When both US growth and inflation are high, the Fed is more likely to raise rates with the aid of supportive data. In an environment where US growth is outperforming its major peers, the US dollar also ten…

Published 
Tags: Gold

Looking at this week’s Commitments of Traders Report, speculators are selling inflation-sensitive currencies including the Japanese yen and the Swiss franc. The British pound remains out of favor following both poor economic data and weak guidance from the Bank of England. Finally, speculators also dumped positions in the Australian dollar, thanks to ongoing US-China trade tensions. The net resul…

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In our last commentary on the Japanese yen, we wrote that the currency was looking excessively weak against the euro. In particular, we stated that bullish catalysts driving EUR/JPY were at risk as speculator positioning in both long euro and short yen trades were looking extreme. In addition, we flagged changes to the Bank of Japan’s “yield curve control” program as a potential risk for yen stre…

Published 
Tags: Japanese yen

In our previous analysis on the pound, we claimed that the number of catalysts driving the currency’s bullish trend were running out. At the time, we warned that the rally was running out of momentum, but did not see any evidence that would suggest adopting a bearish stance. Following recent weakness in the British pound, we downgraded our longer-term outlook on the currency to bearish on April 2…

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In this week’s Commitments of Traders Report, speculators continue to sell positions inversely correlated to the US dollar. As a proportion of total interest, the most meaningful declines this week were in Swiss franc, British pound, and gold net positions. Other assets such as the euro, Canadian dollar, Australian dollar and crude oil also suffered from falling net speculator positions. As a res…

Published 

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