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02/09/24
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Currency and Commodity Movements: CFTC Report Highlights Rising Positions Ahead of Fed Rate Decisions
The latest CFTC Positioning Report for the week ending August 27 reveals significant movements in the currency and commodities markets. Notably, speculators have increased their net long positions in the euro to levels not seen since January, while commercial players have also ramped up their net short positions to multi-month highs. This trend coincides with a rise in open interest, suggesting a heightened level of trading activity. The EUR/USD pair has recently ascended to fresh year-to-date highs around the 1.1200 level, encountering initial resistance at this level. There are emerging concerns regarding a potential rate cut by the European Central Bank in September, which may further support this upward momentum.
In the U.S. dollar market, net long positions have climbed to approximately 19,000 contracts for the first time since early December 2023. However, despite this increase, the US Dollar Index has dipped to new lows for 2024, nearing the 100.50 level. This decline is largely attributed to growing expectations that the Federal Reserve may reduce interest rates later this month.
Meanwhile, non-commercial traders are showing continued interest in the British pound, having added long positions for the third consecutive week, which has resulted in net positions reaching four-week highs. This buying activity has propelled GBP/USD above the 1.3200 level, setting new yearly peaks.
In the Japanese yen market, speculators have maintained net long positions for three weeks running, coinciding with rising open interest. Concurrently, the USD/JPY pair is experiencing a downtrend, reaching three-week lows below the 144 level, driven by the ongoing weakness of the U.S. dollar.
Lastly, in the commodities sector, net longs in gold have surged to nearly 295,000 contracts, even with a slight decrease in open interest. The price of gold has reached an all-time high of over $2,530 per ounce, buoyed by persistent expectations of lower interest rates from the Federal Reserve this month.
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