Increase in US Dollar (USD) Up-Bets Forecast from Speculators: GBP/USD, EUR/USD News

August 10, 2015 - Written by James Fuller

STORY LINK Increase in US Dollar (USD) Up-Bets Forecast from Speculators: GBP/USD, EUR/USD News

US Dollar (USD) Conversion Rate Gives up Some of its NFP-Inspired Gains

The US Dollar pared some of the gains recorded at the close of last week's session as investors lost some of their confidence that the Federal Reserve will increase borrowing costs in September. Economists might have taken Friday's Non-Farm Payrolls report as a green light for adjustments to interest rates but it seems not everyone is as optimistic that the data was strong enough to push the Fed into action. Both the USD/GBP and USD/EUR exchange rates recorded losses.

Earlier...

Exchange Rate Update: US Dollar Supported against Pound, Euro after US Jobs Data

Official figures published by the Commodity Futures Trading Commission (CFTC) on Friday afternoon showed that the US Dollar (currency : USD) enjoyed a surge of support against the other sixteen most actively traded global currencies during the early part of this month. The CFTC numbers are always historical in nature, but that doesn’t stop them being closely monitored by market watchers, as according to the most recent estimates from the World Bank, over 90% of the $5.2tn exchanged on a daily basis in the FX markets is put forward by speculators.

September Rate Hike Expectations to Keep US Dollar to GBP, EUR Conversion Rates Trending Higher

Friday’s data from the CFTC covered the seven days leading up to the 4th August and the pattern which they revealed made for interesting reading. Speculators had been ‘net long’ on the Greenback to the tune of $29.79bn the preceding week, but the latest CFTC reading revealed a jump in the aggregate level of ‘up bets’ on the Buck to $32.77bn as investors factored-in the continuing bullish tone from the US Federal Reserve in its August monetary policy statement which came on the first Wednesday of this month. The Fed’s policymen remained firm in their message that, providing the improvement in conditions in America’s labour market continued on its current course, then a domestic interest rate hike will take place sooner rather than later. Friday afternoon’s go-ahead US jobs data, which once again saw over 200,000 new positions created in the US economy, as well as pointing to higher than previously estimated levels of employment generation in the months of May and June, are likely to ensure that the next set of CFTC figures, due out this Friday, show an increased level of support for the Dollar.

Euro (EUR), Canadian Dollar (CAD), Japanese Yen (JPY) Conversion Rate News Now

Meanwhile, the CFTC numbers also showed a pronounced move out of euro (currency : EUR) denominated assets, with the number of short positions on the single currency increasing from a net 104,008 the previous week to 113,394. Meanwhile, the Canadian Dollar (currency : CAD) and the Japanese Yen (currency : JPY) were the other major losers on the week according to the CFTC data; both the Bank of Japan and the Bank of Canada are considered by investors to be significantly ‘behind the curve’ on monetary policy versus the world’s other leading central banks.

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TAGS: Daily Currency Updates Euro Forecasts Japanese Yen Forecasts Pound Forecasts