USD: Fiscal spending, Fed, and Delta After a strong rally at the start of the week, the move in commodity currencies and EMFX against the dollar seems to be fizzling out. Perhaps that is not a surprise given Friday’s event risk in the form of the Fed’s Jackson Hole. It also should not be a surprise given the number of cross-currents at work at the moment. Should commodity currencies be rallying on news that the US House has made progress on passing a $3.5trn social care law, which will also ...

The safe-haven dollar gained on Wednesday to trade above a one-week low versus major peers amid concerns the highly contagious Delta coronavirus variant could derail a global economic recovery. Risk appetite in global markets has improved since the U.S. Food and Drug Administration granted full approval to the COVID-19 vaccine developed by Pfizer and BioNTech in a move that could accelerate U.S. inoculations. Dr. Anthony Fauci, the country’s top infectious disease expert, said on Tuesday that the United States could get COVID-19 under control by early next year. Still, the ...

Sentiment lifted by US budget progress It is undoubtedly a statement of the blinding obvious that sentiment is driving markets currently, as it always does. That said, these days it is harder and harder to find an underlying cause for swings in sentiment, which appears most days to have a life of its own. Today though, one development may be helping, and that is the US House of Representatives adopting a $3.5tr budget resolution, which should also aid the passage of the $550bn infrastructure bill and spare us from Filibusters ...

The safe-haven dollar traded close to a one-week low versus major peers on Wednesday amid easing concerns that the highly contagious Delta coronavirus variant could derail a global economic recovery. Risk appetite in global markets has improved since the U.S. Food and Drug Administration granted full approval to the COVID-19 vaccine developed by Pfizer PFE.N and BioNTech 22UAy.DE in a move that could accelerate U.S. inoculations. The United States could get COVID-19 under control by early next year, Dr. Anthony Fauci, the country’s top infectious disease expert, said on Tuesday. ...

The dollar was steady on Tuesday, holding near the previous session’s five-day low, as markets appeared less concerned by the spread of the Delta variant, while the New Zealand dollar picked up after hawkish comments from the central bank. Risk appetite in global markets was up, after the U.S. Food and Drug Administration granted full approval to the COVID-19 vaccine developed by Pfizer and BioNTech, a move that could accelerate inoculations in the United States. Rising COVID-19 infections caused by the highly contagious Delta variant have fuelled concerns about the ...

Dollar bullish sentiment eased before rally CFTC data for the week ending 17 August show a marginal decrease in the dollar’s net aggregate positioning versus reported G10 currencies (i.e. G9 excluding SEK and NOK), which was at +2% of open interest. This is broadly in line with movements in the spot market, as the dollar weakened against most G10 currencies between the 10th and 16th of August. We have the impression that some of the moves on 17th August – which was the ignition of the dollar rally seen last ...

Sterling edged up against the dollar and was flat against the euro on Monday, as risk sentiment across markets recovered somewhat after global growth worries sparked a broad selloff last week. Concerns that the Delta coronavirus variant could derail the global recovery and worries major central banks would taper emergency stimulus sooner boosted the safe haven dollar last week at the expense of most major rival currencies. Sterling had its worst week in two months against both the dollar and euro as traders sold off assets perceived as riskier. The ...

The U.S. dollar slipped against its rivals on Monday in a bout of profit-taking after registering its biggest weekly rise in more than two months last week fuelled by concerns over the outlook for global growth. The primary source for investor concern is the global prominence of the Delta coronavirus variant which is set to weigh on European manufacturing survey data due shortly. Keeping in line with the softening trend in Chinese and U.S. PMIs, European PMI data is expected to show the strong recovery seen over the June quarter ...

U.S. dollar net longs slid in the latest week, according to Reuters calculations and Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position declined to $1.06 billion in the week ended Aug. 17, from $3.08 billion in the previous week. U.S. dollar positioning has been net long for five straight weeks after staying net short for 16 months. U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound and Swiss franc, as well ...

China’s commercial banks saw a net forex settlement surplus of 63.2 billion yuan (about 9.73 billion U.S. dollars) in July, the country’s forex regulator said Friday. Forex purchases by banks stood at 1.39 trillion yuan, while sales reached nearly 1.33 trillion yuan, data from the State Administration of Foreign Exchange (SAFE) showed. In the first seven months of the year, China’s commercial banks reported a net forex settlement surplus of 939.2 billion yuan. Supply and demand in China’s foreign exchange market were generally balanced in July, said Wang Chunying, deputy ...

The U.S. dollar hit a new 9-1/2-month high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery just as central banks begin to reverse pandemic-era stimulus. While moves in currency markets were much more contained than on Thursday as equity markets stabilised, the risk-sensitive Australian and New Zealand dollars fell sharply again. The dollar index =USD, which measures the currency against six rivals, rose as high as 93.597 for the first time since early November, before trading little changed at ...

The U.S. dollar hit a new 9-1/2-month high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery just as central banks begin to reverse pandemic-era stimulus. While moves in currency markets were much more contained than on Thursday as equity markets stabilised, the risk-sensitive Australian and New Zealand dollars fell sharply again. The dollar index, which measures the currency against six rivals, rose as high as 93.597 for the first time since early November, before trading little changed at 93.535. ...

The U.S. dollar rose to a nine-month high on Thursday as global markets went into a tailspin after minutes of the Federal Reserve’s last showed policymakers expect to reduce pandemic-era stimulus before the year is out. The dollar index, which measures the U.S. currency’s performance against six rivals, extended gains in early London trading to rise 0.3% to its highest levels since Nov. 5, 2020, at 93.434. According to the minutes of its July meeting, Fed officials largely expect to reduce their monthly bond buying later this year, but consensus ...

The dollar held at a nine-month high versus the euro on Wednesday as major currencies marked time before the release of the Fed’s July minutes, with the kiwi the big mover overnight after its central bank kept interest rates unexpectedly on hold. The Kiwi was up 0.17% at $0.6935 in early London trading having fallen about 1% to $0.6868 immediately after the Reserve Bank of New Zealand said it would keep rates at 0.25%, after the country was put into a snap COVID-19 lockdown. Analysts attributed the kiwi’s bounce to ...

Unstable risk sentiment is likely encouraging the build-up of dollar longs shown in CFTC positioning data. With China’s growth outlook worsening, the antipodeans (especially AUD) are inevitably seeing some shorts being added, while GBP net-longs rose after the Bank of England meeting. Dollar longs on the rise, antipodeans the worst hit CFTC data on FX positioning show that, in the week ending 10 August, speculative investors increased their bullish exposure on the dollar. The USD aggregate net long positioning versus reported G10 currencies (i.e. G9 excluding NOK and SEK) rose ...