Posted Jan 19, 18:10

Yellen Drops Strong USD Policy

Yellen Drops Strong USD Policy  Chart
Jan 19: 

US dollar is well off its highs after Janet Yellen reiterated the importance of allowing market-determined exchange rates and sticking with the status quo order of FX dynamics.  The fact that she did not reiterate the long-touted "strong USD policy" expressed since the mid 1990s may allow for further decline in the greenback. Elsewhere, CAD dropped to start the week on a report saying Biden will halt the Keystone XL pipeline but more than actions themselves, the market will be looking at Biden priorities domestically and abroad early in his term. The chart below dissects EURUSD futures positioning into gross longs and shorts, highlighting the direction and similarity/dissimilarity between now and 2018. 

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PREMIUM INSIGHTS Update: Jan 8, 19:20
Selling Facts & DXY Positioning Jan 18, 2021 18:16: 

It's a holiday in the US and metals are recovering after opening sharply lower in Asia on a broad USD rally, triggered by comments regarding Yellen's likely USD stance (see below). A 'sell the fact' mood hit markets last week after Biden's big stimulus and Friday's retail sales report was a reminder of how much heavy lifting governments are doing. The pound was the top performer last week while the kiwi lagged. CFTC positioning data shows that USD shorts aren't losing their nerve despite the recent bounce. We turn to Yellen's Senate Hearings tomorrow. Below is the net short-positioning of DXY. 


What's after the Stimulus? Jan 15, 2021 14:40: 

Joe Biden unveiled a huge stimulus plan on Thursday and the next step will be to watch how lawmakers react to it. USD pushes back up as yields are immobile, while the reflation trade gets hit as Biden's $1.9 trillion plan is likely to be watered down by lawmakers. Below are some of the trades to fade yesterday's EURUSD bounce and re-enter XAUUSD shorts for our WhatsApp BroadCast Group members.  Ashraf warned members to continue fading any USD pullback ahead and from Yellen's testimony next week .


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