|

USD net shorts rise amid payroll miss – Rabobank

USD net short positions have increased for the first time in four weeks, driven by a decrease in long positions. EUR net long positions have decreased for the second week in a row, driven by an increase in short positions. GBP net positions have turned net short for the first time in 22 weeks, driven by an increase in short positions, and JPY net long positions have decreased, driven by an increase in short positions, Rabobank's economists Jane Foley and Molly Schwartz report.

EUR, GBP, JPY face mounting bearish pressure

"Last week the FOMC released its decision to maintain the policy rate at 4.50%, as was widely anticipated by the market. On Friday, August 1, we saw disappointing nonfarm payrolls at 73k, and a two month revision of -258k. The market is positioned for around two and a half rate cuts by year-end. USD was the best performing G10 currency in July, but the worst year-to-date."

"The ECB  released its decision to maintain the policy rate at 2.00% as was widely anticipated by the market and ourselves. Eurozone unemployment ticked lower from 6.3% to 6.2% on July 30, while July CPI registered in line with June data at 2.0%. The market is pricing in a full 25bp cut at the August 7 BoE meeting, bringing the target rate down to 4.00%."

" Japanese Nationwide CPI inflation data for June printed at 3.3% y/y. The US and Japan agreed to a trade framework which includes a commitment from Japan to invest $550b into American industries and a 15% tariff on Japanese exports to the US. JPY has been the worst performing G10 currency in July."

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.


Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations
Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.
BoJ recap: A pause for now... but Japan has entered a new inflation phase
The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.
The 2% inflation target came from a throwaway remark. It now moves trillions
The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.