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US dollar bullish sentiment changes little ahead of Fed decision

IFC Markets

US dollar net long bets slipped to $28.0 billion from $28.14 billion against the major currencies during the previous week, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to December 13. Economic data during the week provided no surprises to change the expectations the Federal Reserve will hike interest rates at December 13-14 policy meeting. The University of Michigan reported the December Consumer Sentiment jumped to 98 from 93.8 in November, and Initial Jobless Claims fell to 258000 from 268000 while Continuing Jobless Claims declined to 2005 thousand from 2084 thousand.
On the negative note both the import and export prices slipped in November. With the improving consumer sentiment and labor market confirming the positive trend which was strengthened after president Trump’s election, investors made minor adjustment to the dollar bullish bets ahead of the FOMC decision. As is evident from the Sentiment table, sentiment improved for the euro, British Pound and Swiss franc. And the Australian dollar remains the only major currency held net long against the US dollar.
The euro sentiment improved markedly after the European Central Bank decided to reduce the monthly bond purchases as it extended the asset purchase program till the end of 2017. The net short euro position fell by $3.60bn to $11.6bn. Investors increased the gross longs and cut the shorts by 207 and 26836 contracts respectively. The British Pound sentiment improved with Pound net shorts increasing by $0.40bn to $5.7 billion. The net short position in British Pound narrowed as investors reduced both the gross longs and covered shorts by 2654 and 7549 contracts respectively. The Japanese yen sentiment grew more bearish as the net short position widened at roughly the previous week’s pace by $3.6bn to $6.88bn . Investors cut the gross longs and built shorts by 11935 and 17557 contracts respectively.
The Canadian dollar sentiment deteriorated with the net shorts rising by $0.30bn to $1.66bn against the dollar. Investors increased both the gross longs and shorts. The bullish sentiment further deteriorated for the Australian dollar with net longs falling by $0.5bn to $1.0bn. Investors cut both the gross longs and shorts. The sentiment toward the Swiss franc improved marginally with the net shorts narrowing by $21 million to $3.12bn. Investors cut both the gross longs and shorts.

CFTC Sentiment vs Exchange Rate

December 13 2016 Bias Ex RateTrend Position $ mln Weekly Change
CAD bearish positive -1665 -297
AUD bullish positive 1009 -547
EUR bearish positive -11622 3591
GBP bearish positive -5722 397
CHF bearish positive -3124 21
JPY bearish negative -6880 -3159
Total -28004
commitment of traders net long short
commitment of traders weekly change
market sentiment ratio long short positions
Source: https://www.ifcmarkets.com/en/market-sentiment/us-dollar-bullish-sentiment-changes-little-ahead-of-fed-decision?utm_source=financemagnates
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