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US dollar bullish bets fall after FOMC minutes release
US dollar bullish bets fell to $13.0 billion from $15.02 billion against the major currencies during the previous week, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to February 28 released on Friday March 3. Economic data during the week were mixed and minutes of FOMC February meeting were less hawkish than expected.
Existing and new home sales as well as durable goods orders rose in January on month, while pending home sales, initial jobless claims and consumer sentiment by Michigan University declined. The GDP growth remained unchanged at 1.9% on quarter in the fourth quarter of 2016, the same as in the preliminary estimate, after the economy grew 3.5% in the third quarter. The minutes of the Fed’s January 31-February 1 meeting showed policy makers decided to leave rates unchanged due to uncertainty about the new Trump administration's economic plans. Many Federal Reserve policymakers said it may be appropriate to raise interest rates again "fairly soon" if incoming jobs and inflation data are positive pointing to sustained improvement in economy. Investors cut the dollar bullish bets for the ninth time in eleven weeks on mixed economic data after the release of FOMC minutes which were deemed less hawkish than previously believed. As is evident from the Sentiment table, sentiment improved for all currencies except for the Swiss franc, British Pound and Japanese yen. And Canadian dollar together with the Australian dollar remain the two major currencies held net long against the US dollar.
The euro sentiment improved as polls suggested Marine Le Pen, the French presidential candidate from the National Front party, is behind the centrist presidential contenders Francois Fillon and Emmanuel Macron. The National Front leader Marine Le Pen has pledged to take France out of the European Union if she wins the French presidential election this spring. The net short euro position narrowed by $0.9bn to $6.76bn. Investors built considerably both the gross longs and shorts by 12603 and 5516 contracts respectively. The British Pound sentiment further deteriorated with the net short position in British Pound widening $0.30bn to $5.47bn as investors increased both the gross longs and shorts by 5076 and 9395 contracts respectively. The bearish Japanese yen sentiment was essentially unchanged as the net short position widened $26 million to $5.54bn. Investors cut both the gross longs and shorts by 942 and 1087 contracts respectively.
The bullish Canadian dollar sentiment intensified as the net longs rose by $391 million to $2.26bn against the dollar. Investors built the gross longs and covered shorts. The Australian dollar sentiment improved significantly with net longs jumping by $1.4bn to $3.98bn. Investors increased the gross longs and covered shorts. The sentiment toward the Swiss franc deteriorated with the net shorts widening by $0.36bn to $1.47bn. Investors cut both the gross longs and shorts.
CFTC Sentiment vs Exchange Rate
February 28 2017 | Bias | Ex RateTrend | Position $ mln | Weekly Change |
CAD | bullish | negative | 2262 | 391 |
AUD | bullish | negative | 3970 | 1399 |
EUR | bearish | negative | -6762 | 908 |
GBP | bearish | negative | -5466 | -293 |
CHF | bearish | negative | -1468 | -362 |
JPY | bearish | negative | -5541 | -26 |
Total | -13005 |
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