Currency News: Bullish Bets on US Dollar Slide for 3rd Consecutive Week
Currency News:
On Friday, the Commitment of Traders (COT) report demonstrated that currency speculators reduced their bullish bets on the US Dollar for the third consecutive week. The COT is a weekly report released by the Commodity Futures Trading Commission (CFTC). Those who reduced their bets include hedge funds and large futures traders. This week had $62.5 million bet on the dollar, a weekly decline of $72.5 million from the $135 million registered the previous week. The US dollar is now trading at its lowest level since May 2016.
Merely a few days ago, currency analysts predicted the dollar rising based on the Fed interest-rate hikes. However, Fed Chair Janet Yellen was cautious on inflation increasing when she spoke on July 12. In practice, inflation causes the dollar to increase. Robert Sinche, chief global strategist at Amherst Pierpoint said, “We need inflation more than anything else. The employment numbers don’t matter, growth numbers don’t matter. All that matters is inflation”. He continued on saying that the dollar index should reach 100 by the year’s end, up from its current 95.
In the short term, there does not seem to be any reason for the dollar to spike. Until the Fed raises rates, which may not even come by year’s end, there is a sense of hopelessness that has fallen on US dollar traders.