USD Bulls Prolong, AUD Outlook Relies on RBA, CAD Flips to Quick – COT Report

US Dollar, EUR/USD, AUD/USD, COT Report –Analysis

USD Bulls Enhance, Regardless of Cautious Powell
AUD Negatives Priced In, Outlook Relies on RBA
CAD Flips to Internet Quick

USD Bulls Prolong, AUD Outlook Relies on RBA, CAD Flips Shorts – COT Report

In the latest reporting interval to August 31st, speculators continued to pile into the USD, regardless of a comparatively cautious Jackson Gap speech by Fed Chair Powell, which prompted the USD to tug again from multi-week highs. Internet longs within the dollar at the moment are at an 18-month excessive, though, with a percentile rank of 53%, positioning throughout a 3Y lookback is by no means stretched. Nonetheless, the chance for the dollar is that with speculators already lengthy {dollars}, an easing of the present slowdown in financial information, in addition to threat urge for food remaining agency may even see current USD weak point lengthen additional.

Speculators continued to unwind internet longs within the Euro as bullish bets have been slashed by over $2bln, taking total lengthy positioning to $1.5bln. This has additionally taken place at a time the place Bund yields have begun to development greater as markets value in a extra hawkish ECB almost about the Financial institution presumably lowering the tempo of PEPP purchases. Alongside this, because the German election approaches, a lot is being product of the rising momentum of the SPD in current polls, which in flip would improve expectations for looser fiscal coverage, a Euro constructive.

Publicity in commodity currencies was decreased with the Canadian Greenback flipping to internet brief, whereas the Australian Greenback is the most important bearish wager when adjusted for open curiosity. As such, with unfavorable information largely priced into the latter, the outlook will depend upon the trail for financial coverage with an preliminary deal with the upcoming RBA assembly the place markets are considerably 50/50 as as to if the RBA will delay taper or not, given the present Covid backdrop.

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