The latest CFTC Positioning Report for the week ending October 29 reveals significant shifts in the currency markets, particularly involving the Japanese yen and EURO . In a notable change, non-commercial traders emerged as net sellers of the yen for the first time in eleven weeks, offloading nearly 25,000 contracts. In contrast, commercial traders maintained their net long positions, exceeding 28,000 contracts. This activity coincided with an increase in open interest for the fourth consecutive week. Despite this bearish sentiment, the USD/JPY managed to trend upward, reaching new heights near the 154.00 level, with expectations that the Bank of Japan will likely keep interest rates steady during its October 31 meeting.
In the EURO market, speculative traders have been net sellers for the second straight week, now holding a total of approximately 50,300 net long contracts. Meanwhile, hedge funds transitioned to net buyers for the first time in several weeks. Open interest, however, increased by around 1.7%, breaking a trend of declines. The EUR/USD pair exhibited volatility, recently attempting to rally after previously bottoming at around 1.0760. The EURO remains under pressure, affected by rising anticipations of a cautious easing cycle from the Federal Reserve coupled with potential rate cuts from the European Central Bank.
The British pound also faced challenges, with speculative net longs decreasing for the fourth consecutive week to about 66,300 contracts, as open interest continued to taper off. The GBP/USD managed to navigate unsteadily above 1.2900 while remaining entrenched in a broader bearish trend, influenced by dollar strength and cautious sentiment ahead of the UK Autumn Budget announcement.
On the other hand, non-commercial traders maintained a net buying stance on the US Dollar for the second week, with net longs decreasing to around 1,700 contracts. The US Dollar Index sustained its volatility into the upper range beyond the 104.00 level. This recent uptrend in the dollar has been supported by pre-election caution, higher US yields, and robust economic data.
In the commodities sector, net longs in gold have decreased to three-week lows of around 278,600 contracts. While gold has exhibited a sideways movement, it showed a constructive outlook, nearing the significant $2,800 mark per ounce.
