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…

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Tags: Gold

Earlier today, we downgraded our euro outlook to neutral in the medium-term, and bearish in the short-term. As the euro runs out of momentum, the trend is now neutral based on quantitative factors such as price, trading volumes and volatility. While forward-looking economic indicators continue to suggest an ongoing expansion, growth appears to be slowing in rate-of-change terms. This is why our p…

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Tags: Euro

Looking at this week’s Commitments of Traders Report, the most notable changes include falling net positions in the Australian dollar and rising net positions in the British pound. Changes in other currencies and commodities were fairly limited. In general, speculators continue to buy the euro and the British pound, while betting against the US dollar, the Swiss franc and the Australian dollar. T…

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The outlook for the pound, while still bullish, is looking less optimistic today. More specifically, factors including the ongoing slowdown in regional growth, lower expectations for a May rate hike, and significant speculator interest in the currency are hampering the rally. Following Brexit, the trade-weighted value of pound sterling (a measure of GBP relative to other currencies) hit an all-t…

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While the outlook for the Canadian dollar looked dire just a few months ago, the currency appears to have recently turned a corner. After looking oversold in late March, the currency managed to strengthen thanks to a rebound in crude oil prices. Two weeks later, the Canadian dollar received more good news as the Trump administration pushed to conclude NAFTA talks at a faster pace. In more recent …

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In our previous take on the US dollar in early February, we wrote that the currency was set to remain weak. At the time, ex-US growth was accelerating, while speculator sentiment was only mildly bearish. While dollar bulls have argued that rate hikes should help the currency, we wrote that expectations for monetary tightening were rising around the world, limiting the impact from the Fed’s action…

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Tags: US dollar

Relative to recent history, this week’s Commitments of Traders Report contains few notable changes. Looking at the data, the most significant moves include rising net long positions in the euro and falling net long positions in the Australian dollar. Changes in other currencies and commodities were relatively modest. On the bullish side, speculators continue to accumulate net long positions in th…

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In our previous take on the euro in late February, we wrote that the bullish case for the currency was looking increasingly challenging. At the time, euro speculators were spooked by slowing forward-looking economic indicators, while upcoming political events in Italy and Germany risked the future unity of the region. While our outlook remains mildly bullish, this comes with the significant cavea…

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Tags: Euro

Changes in the latest Commitments of Traders Report are fairly similar to last week. Traders are once again increasing their bullish bets on the Japanese yen and the British pound. Yen speculators are now net long for the first time since November 2016. On the bearish side, traders continue to bet against commodity currencies including the Australian dollar and the Canadian. While speculators bou…

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This week’s Commitments of Traders Report includes quite a few notable changes. The number of long positions in the Canadian dollar have fallen by a significant degree, while speculators have also increased their short positions in the currency. The result is that speculators are now net short the Canadian dollar for the first time since July 2017. Speculators have also cut long positions in the …

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