According to the latest CFTC Commitment of Traders Report, net long USD positions were virtually unchanged after falling modesty for the first time in the previous week since the middle of June.
- “Bullish sentiment towards the dollar is unlikely to change as the prospects of prolonged trade war between the US and China do not bode well for emerging markets.
- Speculators trimmed their bearish bets against the euro to the lowest level since June. We, however, are of the view that it is too early to adopt a far more constructive view on the single currency due to various challenges the Eurozone faces, including weak economic activity in Germany and political uncertainty in Italy.
- Net short GBP positions fell further as investors took profits amid growing optimism that the worst-case scenario of a hard Brexit may be avoided.
- CAD net long positions fell further amid rising expectations that the BoC will respond to the significant escalation in trade tensions lowering interest rates in the coming months.”