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3 Dec 2014
USD longs: Unlikely to add heavily ahead of ECB, NFP
FXStreet (Bali) - In the last 24 hours, we have seen a solid return of US Dollar demand across the board, sending USD exchange rates vs majors near trend highs once again.
Is the market about to embark on another frenzy of USD buying to resume the underlying USD bull trends? So far only AUD and JPY are printing fresh year lows, and with USD longs positions so crowded ahead of Thursday's ECB and Friday's US NFP, an extension of USD gains may have to wait another 24h/48h minimum to see full-fledged USD demand flows given the potential risks both the ECB and NFP carry.
The consensus of any setback in the US Dollar being perceived as a great opportunity to reset long positions at a better prices remains, given the divergence in monetary policy expectations against most other Central Banks, especially the ECB and BoJ.
Furthermore, another huge positive input for the USD, not getting too much 'air time' though, were new insights learned into the current thinking at the helm of the Fed to lower energy prices, following comments by Fed Vice Chair Stanley Fisher and NY Fed President Dudley on Monday, noting that the ongoing declines in Oil prices are not a cause of major concern for the Central Bank, suggesting that lower Oil should not be an impediment for the Fed to stick to its tightening commitment later next year (Q3 2015).
Is the market about to embark on another frenzy of USD buying to resume the underlying USD bull trends? So far only AUD and JPY are printing fresh year lows, and with USD longs positions so crowded ahead of Thursday's ECB and Friday's US NFP, an extension of USD gains may have to wait another 24h/48h minimum to see full-fledged USD demand flows given the potential risks both the ECB and NFP carry.
The consensus of any setback in the US Dollar being perceived as a great opportunity to reset long positions at a better prices remains, given the divergence in monetary policy expectations against most other Central Banks, especially the ECB and BoJ.
Furthermore, another huge positive input for the USD, not getting too much 'air time' though, were new insights learned into the current thinking at the helm of the Fed to lower energy prices, following comments by Fed Vice Chair Stanley Fisher and NY Fed President Dudley on Monday, noting that the ongoing declines in Oil prices are not a cause of major concern for the Central Bank, suggesting that lower Oil should not be an impediment for the Fed to stick to its tightening commitment later next year (Q3 2015).