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US dollar bearish bets increase accelerated at more than double of prior week’s pace with total net shorts reaching $24.28 billion from $18.82 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to July 28 and released on Friday July 31. The increase in net short dollar bets resulted from decreases in bearish bets on Canadian and Australian dollar, and significant increase in bullish bets on Japanese yen and euro as German business sentiment continued recovery in July according to Ifo report. The bearish dollar bets rose again as Q2 US GDP contracted 32.9% over quarter in annualized terms due to the coronavirus outbreak and US Labor Department reported 1.42 million Americans filed for first-time unemployment benefits, a rise of 109,000, while US manufacturing and services PMI’s rose less than forecast with manufacturing sector recording expansion for July.

The powerful weakening of the US dollar came in anticipation of another bailout package for the US economy hit by the coronavirus. It was assumed that the funds would be obtained through the Fed’s money issue and, basically, would be mostly donated as subsidies. The US authorities continue the discussion on this subject. The euro strengthened after the heads of the EU countries agreed on their plan for financial assistance to the European economy. Against the background of the quarantine, car sales and stocks of automakers decreased significantly.

US dollar net short bets increase continued at prior week’s pace with total net shorts reaching $18.82 billion from $16.66 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to July 21 and released on Friday July 24. The increase in net short dollar bets resulted mainly from significant decrease in bearish bets on Canadian dollar and increase in bullish bets on euro as European Central Bank kept its policy steady, as expected, while euro-zone’s current account surplus declined in May instead of an expected increase. Pound and Canadian dollar maintained net short positions against the dollar. The bearish dollar bets rose again as US Labor Department reported 1.3 million Americans filed for first-time unemployment benefits when 1.24 new applications were expected in the prior week, while data showed retail sales rose 7.5% in June instead of 5.4% increase forecast.

US dollar bearish bets increase quadrupled with total net shorts reaching $16.6 billion from $14.48 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to July 14 and released on Friday July 17. The increase in net short dollar bets resulted mainly from significant increase in bullish bets on Swiss franc and euro as the index for German prices wholesalers charge for goods rose in June and the industrial production recovery accelerated both in France and Italy. The Pound and Canadian dollar maintained net short positions against the dollar, while Australian dollar left the trio of major currencies with net short positions against the greenback. The bearish dollar bets rose again despite US Labor Department report 1.3 million Americans filed for first-time unemployment benefits when 1.4 new applications were expected in the prior week, while the federal budget deficit more than doubled in June.

Shares of Chinese and Hong Kong companies fell in price amid yet another aggravation of US-Chinese relations. The US President Donald Trump signed a law imposing restrictive measures on China because of its policy towards Hong Kong. Hong Kong dollar weakened against the euro. Amidst relatively high world oil prices, other commodities also went up, which helped to strengthen the currencies of exporting countries - South Africa, Canada, Australia, Norway and Mexico. The euro strengthened ahead of the ECB meeting and the summit of the heads of the EU countries.

US dollar net short bets declined to $14.48 billion from $13.89 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to July 7 and released on Friday July 10. The change in net short dollar bets resulted from significant decrease in bearish bets on Canadian dollar, British Pound and increase in bullish bets on euro, which outweighed a marked decrease in yen bullish bets. The Pound, Canadian and Australian dollars maintained net short positions against the dollar. The bearish dollar bets rose again despite US Labor Department data showed that the US added back 4.8 million jobs in June when a gain of 3.7 million jobs was expected, and Institute of Supply Management report its manufacturing purchasing managers index climbed to 52.6 from 43.1 in May. Readings above 50 indicate an expansion in economic activity. Bullish euro view was supported by sharp easing in euro-zone’s business activity contraction in June according to final services PMI reading.

US dollar bearish bets declined to $13.89 billion from $16.93 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to June 30 and released on Monday July 6. The change in net short dollar bets was mainly the result of significant increase in Pound bearish bets and decrease in bullish bets on yen and euro as German import prices recovery was slower than anticipated in May. The Pound, Canadian and Australian dollars maintained net short positions against the dollar. The bearish dollar bets fell as US Census Bureau reported durable goods orders rose above expected 15.8% over month in May and consumer spending climbed to a record 8.2% after tumbling in April. Chicago Fed President Charles Evans’ comment the US economy may require more monetary stimulus didn’t result in increase in dollar bearish bets.

US dollar net short bets rose to $16.93 billion from $15.69 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to June 23 and released on Friday June 26. The significant increase in Pound bearish bets as the Bank of England left interest rates unchanged at 0.1% but increased its bond buying by £100 billion ($125 billion) were offset by decrease in bearish bets on Canadian dollar and increase in yen bullish bets. Euro bearish bets changed little as European Union’s 27 governments started negotiations over a proposal for a 750 billion euro ($841 billion) recovery fund. The Pound, Canadian and Australian dollars maintained net short positions against the dollar. The bearish dollar bets rose as US initial jobless claims rose above-expected 1.5 million the previous week while Chicago Fed’s national activity index recovered in May - indicating expanding economy.

In the last 7 days, most financial markets have been in a neutral trend. Therefore, the top gainers/losers are assets with quotes that move for internal reasons. Thus, the weakening of the Mexican peso may be due to the plans of Banco de México to reduce the rate to 5% from 5.5%. The South African rand reacted to negative macroeconomic indicators and budget figures. Unemployment in South Africa increased to 30.1% in the 1st quarter. The Swiss franc strengthened as a “defensive” asset after reporting another problem in the US-China trade and a new outbreak of coronavirus in individual countries.

US dollar net short bets jumped to $15.69 billion from $9.51 billion against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to June 16 and released on Friday June 19. The change in overall dollar net position resulted due to steep decreases in bearish bets on Australian dollar and British Pound, as well as increase in bullish bets on Japanese yen. And a significant decrease in bullish bets on euro didn’t offset the increase in dollar bearish bets. The Pound, Canadian and Australian dollars maintained net short positions against the dollar. The bearish dollar bets increase accelerated as Federal Reserve projected the US economy would shrink 6.5% in 2020 while Powell said the economic recovery will be “a long road” as the central bank left interest rates unchanged. Positive data like US producer prices’ first increase in four months in May and another decline in initial jobless claims weren’t sufficient to offset bearish impact of Fed’s projections and the announcement it would expand the scope of its $750 billion emergency corporate debt loan program to include individual corporate bonds.

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