EURUSD
Non-Commercials reduced their net long positions in the Euro last week selling 10k contracts to take the total position to 86k contracts. This latest position adjustment comes on the back of the ECB’s September meeting. The bank had widely been expected to announce further tapering measures in line with earlier guidance. However, the bank refrained from adjusting their purchases at this point and instead signalled that they would wait until the October meeting. Notably Draghi refrained from commenting on the exchange rate which the bank had previously cautioned was having a negative due to its recent appreciation. Draghi will be speaking twice this week and both sets of appearances will be closely watched by traders for any further comments ahead of the October meeting.
GBPUSD
Non-Commercials reduced their net short positions in Sterling last week buying 7k contracts to take the total position to -46k contracts. Sterling is currently caught between two opposing market forces, with uncertainty linked to Brexit exerting downward pressure while increasing hawkish BOE expectations provide support. At their latest meeting, the BOE noted that removal of monetary stimulus would likely be appropriate over the coming months if the economy continues to perform as expected. These comments fuelled a sharp repricing in the rates market as the chances of a 2017 rate hike have now increased significantly.
Read more: https://www.orbex.com/blog/2017/09/fx-cot-update-gbp-shorts-reduced-rate-hike-expectations-increase