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USD Index at YTD Highs, Squeezing Net Short Position

FOREX
  • The USD Index touched the best levels of the year so far this morning at 105.100 during Asia-Pac hours. The moves comes as an extension off the Monday strength and the better-than-expected ISM Manufacturing release, which tipped prices paid to the highest level in over a year - raising questions over the sustainability of the recent slowdown in inflation. Despite this, CFTC data covering positioning as of the Tuesday close shows markets swung their net USD position short for the first time since 2021, potentially exposing the currency to corrective recoveries on flatting US economic data.
  • CHF is the poorest performer in G10 early Tuesday, prompting EUR/CHF to recover well off pullback lows printed late last week. This keeps the cycle high and bull trigger within range at 0.9820 in EUR/CHF, a level that could come into play should ECB rate cut pricing follow the lead of the Fed gyrations so far this week. OIS markets currently price ~93bps of rate cuts from the ECB for this year.
  • NOK is the firmest currency so far Tuesday, moving in tandem with oil prices. Brent crude futures have extended the rally off last week's lows to 4.5%, but EUR/NOK holds within range of recent cycle highs. First resistance holds at 11.7914 - a mark tested, but not topped, across both the Monday and Friday sessions. Clearance of last week's highs in EUR/NOK would open levels last seen in December and the next major upside resistance of 11.8695.
  • Preliminary German CPI numbers for March are due, JOLTs job openings take the focus for the US session ahead, with final durable goods orders also on the docket. Fed speakers are plentiful, with Fed's Bowman, Williams, Mester and Daly all on the docket.
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  • The USD Index touched the best levels of the year so far this morning at 105.100 during Asia-Pac hours. The moves comes as an extension off the Monday strength and the better-than-expected ISM Manufacturing release, which tipped prices paid to the highest level in over a year - raising questions over the sustainability of the recent slowdown in inflation. Despite this, CFTC data covering positioning as of the Tuesday close shows markets swung their net USD position short for the first time since 2021, potentially exposing the currency to corrective recoveries on flatting US economic data.
  • CHF is the poorest performer in G10 early Tuesday, prompting EUR/CHF to recover well off pullback lows printed late last week. This keeps the cycle high and bull trigger within range at 0.9820 in EUR/CHF, a level that could come into play should ECB rate cut pricing follow the lead of the Fed gyrations so far this week. OIS markets currently price ~93bps of rate cuts from the ECB for this year.
  • NOK is the firmest currency so far Tuesday, moving in tandem with oil prices. Brent crude futures have extended the rally off last week's lows to 4.5%, but EUR/NOK holds within range of recent cycle highs. First resistance holds at 11.7914 - a mark tested, but not topped, across both the Monday and Friday sessions. Clearance of last week's highs in EUR/NOK would open levels last seen in December and the next major upside resistance of 11.8695.
  • Preliminary German CPI numbers for March are due, JOLTs job openings take the focus for the US session ahead, with final durable goods orders also on the docket. Fed speakers are plentiful, with Fed's Bowman, Williams, Mester and Daly all on the docket.