US Dollar Selling Reversed, Japanese Yen Deteriorates, CAD Buying Persists - COT Report
27 Jan 2020 09:00, GMTCOT Report – USD, GBP, CAD & JPY Analysis
- US Dollar Selling Reversed
- Japanese Yen Sentiment Deteriorates Sharply
- Canadian Dollar Buying Persists
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Source: CFTC, DailyFX (Covers up to January 21st, released January 24th)
US Dollar Selling Reversed, Japanese Yen Deteriorates, CAD Buying Persists - COT Report
According to the latest CFTC report, investors had added bullish bets in the US Dollar for the first time in 6-weeks with net longs growing around $1bln against G10 currencies to $7.638bln.
The largest positioning change had been observed in the Japanese Yen with sentiment for the safe-haven continuing to deteriorate as net shorts grew $1.5bln amid an increase in outright JPY shorts. However, speculators look to have been wrong-footed amid the coronavirus outbreak, which underpinned the JPY, making the currency the best performer last week. Net positioning in the Swiss Franc flipped to long for the first time since August 2017.
Speculative net longs in the Canadian Dollar rose for a fourth consecutive week. However, a dovish BoC meeting on January 22nd, alongside a plunge in oil prices had subsequently meant that the Loonie was among the underperforming currencies last week. Positioning changes in the Australian Dollar saw net shorts marginally cutback, while speculators have now switched to net long in the New Zealand Dollar.
The Pound saw a minor contraction in net bullish bets as gross shorts pick-up. Although, the near-term direction for GBP will depend on the upcoming Bank of England decision, whereby expectations for a cut is a coin-toss. We sit in the camp that the BoE will refrain from easing and instead opt for a dovish hold. Elsewhere, net shorts in the Euro moderated slightly, although, given the sizeable bearish bets in the currency, upside remains limited.
US Dollar
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--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.