CFTC Watch ? US Dollar USD Future Sentiment Softens

December 16, 2014 - Written by John Cameron

STORY LINK CFTC Watch ? US Dollar USD Future Sentiment Softens

Currency News UK Pound to Dollar Exchange Rate Report

Official data from the Commodity Futures Trading Commission (CFTC), published last Friday, have suggested that the US Dollar’s recent bull run may be reaching its conclusion.

US Dollar Exchange Rate to Weaken?

The figures showed that the total value of net ‘long’ positions on the Buck had dropped to $42.19bn during the week ending 9th December. This represented a significant fall from the previous week’s showing of $47.38bn, hinting that sentiment towards the Buck is now on the turn.

Anti-Euro Sentiment Softens

The numbers also revealed that investors’ view of the euro (currency:EUR) had firmed slightly, with a total net short position of -136,912, significantly down from the week before’s showing of -159,279. It would appear that the single currency has benefitted from two major developments in the global economy during recent sessions; firstly, the drop in the price of a barrel of crude oil to its lowest level for over five years has raised the spectre of deflation in several leading global economies, including the UK and USA. Previously analysts had surmised that the prospect of falling prices was contained to the eurozone’s economy only. Secondly, market participants appear to be confident that Germany will stand firm in its ideological objection to sovereign debt purchases comprising part of the European Central Bank’s ongoing loosening of monetary policy. German policymakers’ insistence that they will not countenance such a form of Quantitative Easing appears to be propping up the euro in the markets.

Pound Sterling Outlook Improves

Meanwhile, the CFTC numbers also suggested that sentiment towards the Pound Sterling (currency:GBP) has firmed during recent sessions, with the number of speculators holding net ‘short’ positions on Sterling versus the Dollar dropping from 31,014 to 23,602. However, many analysts suggest that this morning’s UK inflation figures for November could put paid to the Pound’s near-term renaissance versus the Buck. Yesterday’s Rightmove House Price data added to the immediate uncertainty surrounding Sterling. The British property market has been bombing forward during recent months, but the latest data suggests that this move forward may be running out of momentum. The December annualised price rise numbers showed a pronounced drop from November’s 8.5% to 7.0%. It appears that the Bank of England’s policy of choking off levels of UK mortgage lending are having their desired effect, so the forecast for the Pound has deteriorated as a result.

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