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Speculators Forecast Rising Pound-US Dollar Short GBP USD Positions

August 3, 2015 - Written by Toni Johnson

US Factory Orders Data May Impact GBP to USD Conversion Rate Today



While this morning's UK Construction PMI might have a modest impact on the Pound Sterling to US Dollar exchange rate, investors are more likely to be taking an interest in the US Factory Orders report. A 1.7% increase is expected, but if the US data follows the recent trend and falls short of forecasts, 'Cable' could advance ahead of Wednesday's influential UK Services PMI.

Earlier...

Current Pound Sterling to US Dollar (GBP/USD) Exchange Rate News



The latest estimates from the World Bank suggest that of the $5.2tn exchanged in the global currency markets on a daily basis, over 90% is put forward by speculators.

It’s therefore no exaggeration to posit that short term bets from institutional investors govern the trends at play for the Pound Sterling (currency : GBP) against the other sixteen most actively traded currencies. For these reasons, the weekly data published by the Commodities Futures Trading Commission (CTFC) is always considered significant by market participants and the latest edition of these numbers, released just before the weekend market close, was no exception.

The aggregated value of the total net US Dollar (currency :USD) long positions held by speculators during the seven days leading up to the 28th July came in at $29.79bn – slightly up from the previous week’s showing of $29.77bn. Significantly, the period used for measuring speculators’ positions, (i.e. the seven days up to and including 28th July), just missed out on the latest US Federal Reserve monetary policy announcement, which came on the evening of Wednesday 29th July.

FOMC Decision Triggers GBP/USD Exchange Rate Movement, 'Cable' Declines Expected



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As it turned out, the Fed chose to maintain its headline interest rate at its current ultra-low range, but the text of the statement which accompanied the announcement was interpreted by analysts as being consistent with a US interest rate hike before the end of this year. For this reason, FX insiders suggest that this Friday’s CFTC data may show that even more speculators are now holding US Dollar-positive positions. Analysts predict that such an outcome could send the Pound Sterling US Dollar exchange rate down towards the 1.5000 GBP USD threshold before the end of the month.

FX Predictions: US Payrolls Data to Drive USD to GBP, EUR Volatility This Week



However this week’s session sees the release of several key data sets which will determine whether such a move takes place for GBP USD and if so how quickly it will happen. This afternoon brings a brace of economic statistics from the States in the form of June’s Core Personal Consumption Expenditure and this month’s domestic ISM Manufacturing survey. Friday’s US Non-Farm Payrolls data is also forecast to be defining in the short term for GBP USD.
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