CFTC Data Sees Speculators Pare their US Dollar USD Forecast

Modified: Monday, 26 October 2015 09:23 BST - Written by John Cameron

STORY LINK CFTC Data Sees Speculators Pare their US Dollar USD Forecast

CFTC Predict US Dollar (USD) Downtrend as Support Slumps ahead of the Federal Reserve Interest Rate Decision

Last Friday’s Commodity Futures Trading Commission (CFTC) data revealed that speculators had significantly scaled back their positive bets on the US Dollar (currency : USD) for the second week in succession.

The figures, which cover the seven days leading up to 20th October, were particularly closely-monitored given that they are the last set of CFTC numbers before tomorrow’s make-or-break US Federal Reserve monetary policy decision.

Drilling down into the numbers, analysts noted that support for the Buck had slumped to $13.32 bn during the period in question – a major fall from the preceding week’s $18.97 billion level of support.

Analysts Predict Federal Reserve will Hold Rates Tomorrow, US Dollar to Strengthen on Hawkish Outlook

The message from institutional investors appears clear – collectively, they hold a strong belief that America’s policymakers will avoid increasing interest rates tomorrow.

However, the shift out of Dollar-denominated assets was so pronounced that it appears that speculators believe that there is a high percentage chance that the Fed will go further than this and rule out a US interest rate hike this year.

The level of support for the Buck slid to its weakest level since July 2014 as a result.

Foreign Exchange Forecasts Now: US Consumer Confidence Survey to Provoke US Dollar Volatility

This afternoon’s US Consumer Confidence survey, penned in for publication at 1400hrs, will give investors further information regarding the likely thinking of the Federal Reserve’s policymakers tomorrow evening.

A showing of 102.8 is expected from the October number – marginally down from September’s showing of 103.0. Such a result, pointing to waning levels of optimism amongst American economic participants, could prove to be the death knell for any hope of an interest rate hike before the turn of the year.

Looking ahead, tonight’s Australian Consumer Prices Index data for Q3 is expected to show at an annualised 1.8% versus Q2’s counterpart figure of 1.5%.

Such an outcome would cause FX insiders to scale back their forecasts for another near-term interest rate cut from the Reserve Bank of Australia. The Pound Sterling Australian Dollar exchange rate would be likely to drop as a result.

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TAGS: American Dollar Forecasts