Exchange Rate Forecasts For Euro, US Dollar & Japanese Yen on CFTC Data

November 24, 2014 - Written by John Cameron

STORY LINK Exchange Rate Forecasts For Euro, US Dollar & Japanese Yen on CFTC Data

Currency News UK brings you the exchange rate forecasts for the Euro (currency:EUR) and the Japanese Yen (currency:JPY).

Official data published by the Commodity Futures Trading Commission (CFTC) on Friday revealed that institutional investors have increased their bets that the US Dollar (currency:USD) will strengthen – they now stand at their highest level in some six years.

US Dollar Forecast: Federal Reserve Lying?

During the week ending 18th November, speculators were holding ‘Dollar long’ positions totalling USD43.99bn, but this has now increased to USD46.45bn, suggesting that market participants do not believe the US Federal Reserve is being wholly straightforward in its rhetoric.

The minutes of Octobers’ US central bank meeting, published last Wednesday evening, revealed that America’s policymakers had once again argued long and hard on whether to state that US interest rates would remain low for a ‘considerable time’. The memos showed that eventually a consensus was reached to include the closely-watched for phrase, partly because of concerns at the market turbulence which might be triggered by an omission.

Investors Await US Data

Market participants clearly feel that the Fed will be upping its key lending rate sooner than the Fed’s words suggest, which is why they are scrambling to hold Greenback-denominated assets.

Their positions could be vindicated on Tuesday with the publication of a brace of keynote US data sets.

Q3 annualised Gross Domestic Product numbers lead the way at 13:30hrs. A slight down shift from Q2’s encouraging showing of 3.5% is anticipated – anything more than this and the clamour for the Fed to countenance a rate hike will become louder.

Meanwhile, the publication of this month’s US Consumer Confidence survey, which follows 90 minutes later, will be likely to provide the Buck with further direction.

Yen exchange rate (JPY) & Euro EUR Remain Friendless

Elsewhere, the CFTC data also revealed that sentiment towards the Japanese Yen (currency:JPY) and the euro (currency:EUR) had also slipped.

These two currencies continue to suffer because of the state of the economies which they are backed by.

The eurozone and Japanese financial systems have been labelled ‘basket cases’ by market commentators in recent months.

The fact that both the Bank of Japan and the European Central Bank appear to consider monetary easing as the solution to their perilous situations has added to the selling pressure on both the Yen and the single currency.

Analysts forecast further losses for both into the medium term.

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