US dollar

Outlook
Bullish
DAILY UPDATEThe US dollar is currently steady. The buck is slightly higher against the euro, the British pound, and the Japanese yen, while selling off against the Australian dollar. Yesterday, the US dollar index (a measure of the currency against its largest peers) surged to new highs as US-China trade tensions escalated. Today's trading range for the US dollar index is 94.20 - 95.30.  Following the US trading session last night, global risk sentiment is rebounding. Safe haven assets, such as US Treasury bonds and the Japanese yen, are currently selling off. Meanwhile, riskier assets such as equities are rebounding after buyers "bought the dip". Thanks to accelerating growth and inflation in the...

Euro

Outlook
Bearish
DAILY UPDATEThe euro is mostly weaker today. The common currency is selling off against all major currencies except the Japanese yen. Yesterday, the euro sold off sharply as US-China trade tensions worsened but made back most of its losses later in the day. Today's EUR/USD trading range remains 1.1510 - 1.1680.  Thanks to the ongoing conference on central banking in Sintra, Portugal, traders are paying close attention to recent comments from European Central Bank speakers. In a speech delivered yesterday, ECB President Mario Draghi struck a dovish tone, suggesting that the Bank will remain patient and that future rate hikes will come at a gradual pace. While the ECB has signaled its intentions to ...

British pound

Outlook
Bearish
DAILY UPDATEPound sterling is mixed today. The pound is currently lower against the US dollar, Canadian dollar and Australian dollar, while strengthening against the Japanese yen and the euro. Yesterday, the pound sold off against the US dollar following an escalation in US-China trade tensions. Today's GBP/USD trading range is 1.3150 - 1.3310. The pair continues to trade just above the low end of our daily trading range, suggesting that the pound is oversold.  Today is a critical day for Prime Minister Theresa May's Brexit bill as the document is set to return to the House of Commons. As described in yesterday's daily update, bills "ping-pong" between the House of Lords and the House of Commons w...

Japanese yen

Outlook
Bearish
DAILY UPDATEThe Japanese yen is mixed today. The yen is currently strengthening against the euro, British pound and the Canadian dollar, while selling off against the US dollar and the Australian dollar. Yesterday, the yen moved up sharply thanks to escalating US-China trade tensions. Following a positive US trading session last night, traders are selling safe havens and buying riskier assets such as equities. Today's USD/JPY trading range is 109.50 - 111.20.  Turning to recent developments, the Bank of Japan's minutes suggested that the institution remains on hold. While one policymaker called for additional easing, all other members believed that the BoJ's policies were appropriate. While Japan'...

Australian dollar

Outlook
Bearish
DAILY UPDATEThe Australian dollar is up against all major currencies today. The Aussie is currently the strongest against the euro and the Japanese yen. Yesterday, the currency fell sharply thanks to escalating US-China trade tensions. Today's AUD/USD trading range is 0.7350 - 0.7510. After warning that the Australian dollar was looking oversold (yesterday), the currency has moved up today.  The Australian dollar turned a corner during US trading hours last night. While the currency sold off at the outset of the day, US traders bought riskier assets (such as commodities) while selling safe haven investments. As risk sentiment rebounded, the Australian dollar also moved up as a result. Yesterday...

Canadian dollar

Outlook
Bearish
DAILY UPDATEThe Canadian dollar is mostly weaker today. The loonie is currently selling off against all currencies except the euro and the British pound. Yesterday, the Canadian dollar fell sharply against the US dollar as US-China trade tensions escalated. Today's USD/CAD daily trading range is 1.3060 - 1.3310. Earlier today, USD/CAD made a 12-month high after the pair jumped above 1.33. The Canadian dollar continues to look oversold.  Turning to the latest NAFTA-related developments, Trump said that NAFTA discussions were "getting there", but signaled his intent to move to bilateral talks if ongoing talks fail. At a recent news conference, Mexican foreign minister Videgaray expected another a me...

Gold

Outlook
Bearish
DAILY UPDATEGold prices are currently slightly lower. Yesterday was another bad day for the precious metal. At the outset of the day, gold prices strengthened as US bond yields fell. After the US market open, bond yields fell as traders rotated into riskier assets and out of safe haven investments. Thanks to the reversal in yields coupled with US dollar strength, gold ended the day lower. Today's gold trading range is $1,271 - $1,290. The precious metal continues to trade towards the bottom end of our daily trading range.  Looking at gold today, both a rising dollar and rising bond yields continue to weigh on the precious metal. The US dollar index, a measure of the currency based on its largest p...

Crude oil

Outlook
Neutral
DAILY UPDATECrude oil prices are currently recovering. Both Brent crude and WTI are strengthening today. Yesterday, the commodity sold off alongside riskier assets thanks to rising US-China trade tensions. Following a bigger than expected drop in unofficial US crude inventories and rebounding risk sentiment, crude oil made back some of its recent losses. Today's WTI trading range is $63.60 - $67.80.  Turning to recent developments, US inventories fell by a fairly large degree according to yesterday's American Petroleum Institute figures. Last week, API figures suggested a build of 0.8m barrels. Falling crude oil stocks suggest strong US demand coupled with limited supply. As the world's largest cr...

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…

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