Current Market Sentiment

Current Sentiment:
Last week the USD finished mixed, gaining against the AUD and CAD, but falling against the EUR, GBP, JPY and CHF. Concern about China has continued to gather momentum, because of its stock market rout and a surprise move to devalue the yuan. China’s slowdown has continued to pressure commodities with oil breaking below the $40 mark, and copper moving to fresh multi- year lows. The AUD has been hit particularly hard by the decline in the copper market and China developments, already declining to test 0.7200 to open the week.

The USD has been hit from both uncertainty in emerging markets, as well as declining sentiment of a September hike from what many consider less hawkish minutes of the most recent FOMC meeting. The aggregate long USD position has suffered a sizeable $5.3bn w/w decline, its greatest weekly fall since December 2014 according to Friday’s CFTC data.

EUR has remained well bid seeing increasing sentiment sparked by short covering that was kicked off by an unwinding of the euro/yuan carry trade after consecutive yuan devaluations by the PBOC.

Today in Asia the EUR opened strong continuing last week’s sentiment. It moved higher in the session to test 1.1500 against the USD before finding some resistance, and strengthened against the NZD, AUD, GBP,and CAD.

There is no major economic data on the calendar for today’s London session.

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Source:: Current Market Sentiment

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