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…

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…

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…

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…

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…

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…

In our previous commentary on the US dollar, we warned that a weak dollar was hiding significant risks in growth-sensitive assets such as equities and European currencies. As the world’s reserve currency, the buck is inversely correlated to most financial assets because most cross-border lending is conducted in dollars. Thanks to a slowdown in economic growth outside the United States coupled wit…

This week’s Commitments of Traders Report includes quite a few meaningful changes in speculator positions in major currencies and commodities. In recent history, changes have been fairly insignificant. Specifically, net positions in the euro, the British pound and gold are all down this week. On the flip side, net positions are higher in commodity currencies such as the Australian dollar and the …

In our previous take on the Australian dollar in late February, we wrote that falling commodity prices, an ongoing slowdown in China, and weak domestic conditions (looking at both economic data and monetary policy expectations) were significant headwinds for the currency. Beyond economic indicators, quantitative signals also suggested that the bullish trend was running out of steam. We downgraded…

Last week, we wrote that weakness in the US dollar is masking growing risks. As equities, commodities and corporate credit are inversely correlated to USD, investors need to pay attention to the risk of a US dollar rebound. Since early 2017, gold prices have gradually strengthened. As the precious metal serves as a barometer for US dollar liquidity, the clear message from gold was that monetar…