Intraday Market Thoughts

Dollar on the Defensive as Yen Climbs

by Adam Button
Mar 24, 2012 9:49

The US dollar edged lower in US trading but the big story in the week was the rebound in the Japanese yen. On Friday, the commodity currencies led and USD lagged. The CFTC positioning report showed a hefty cut in USD longs. Premium gold short of 1670 remains unfilled & silver in progress. All EURUSD & GBPUSD premium shorts hit targets.1 of 2 AUDUSD shorts in done, the other unfilled.

There was no strong driver in Fridays trading but theme was to sell the buck. USD/JPY briefly fell below 82.00 for the first time of the week, EUR/USD flirted with 1.33 and the Australian dollar rebounded after several days of declines.

The only notable data point was new home sales, which fell short of the 325K consensus with a reading of 325K. Comments from the Feds Bullard and Lockhart continued to suggest optimism about US economic growth and minimal worries about inflation.

The CFTC Commitment of Traders report showed the USD net long position scaled back by 37%. The euro remains the most heavily shorted currency but positioning fell to -83K from -99K. The move away from GBP shorts was dramatic to -16K from -42K. Similarly, JPY shorts declined to -26K from -44K. The US dollar made up ground against AUD (to +45K from 67K) and NZD (+4K from +13K) but lost ground against CAD, where longs increased to +42K from +27K. All the data is as of the close on Tuesday.

In our latest PREMIUM INTERMARKET TRADES, all EURUSD. GBPUSD & AUDCAD trades were done. 1 of 2 AUDCAD & and 1 of AUDUSD shorts were done and the others 2 unfilled. EURGBP & silver are in progress, while gold short of 1670 remains unfilled. For more detail, see Non Subscribers can click here:


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