The dollar has a large number of short positions
Last week in the world markets was marked by a weakening dollar. At the beginning of this week there was a reversal: the “American” played some of the positions. Under the greatest pressure were the protective currencies – the Japanese yen and the Swiss franc – against the backdrop of a decrease in geopolitical tensions in the world.
We note that the number of long positions in the euro continues to grow on expectations of a gradual curtailment of the ECB’s stimulus program. The global trend of strengthening the euro remains in place.
At the same time, according to the Commodity Futures Trading Commission (CFTC), the number of net short positions in the dollar rose to $ 10.9 billion, the highest since January 2013. What does this mean? The fact that in case of a trend reversal, the dollar can be strengthened at an accelerated pace with the closure of short positions. Correction on the euro / dollar pair can proceed quickly. The motive may appear next week (recall that the meeting of the US Federal Reserve is scheduled for September 19-20). In the next few days, we expect consolidation of EUR / USD in the region of 1.2.
This week is worth watching the statistics on the US economy: inflation, data on retail sales, consumer confidence and industrial production. These reports can affect the rhetoric of Janet Yellen at the Fed meeting. Note that the problem of Shutdown was postponed to a later date: Congress raised the US public debt ceiling until December 5. Another event – on September 6, resigned Deputy Chairman of the Federal Reserve Stanley Fischer (he will leave in October). This somewhat weakens the position of Janet Yellen in the Fed, which is negative for the dollar.
The strengthening of the ruble may pause
Last week, the dollar / ruble exchange rate fell below the level of 57 rubles. for the first time since June. In favor of the ruble, the weakening of the dollar, the growth of oil quotations and the demand for Russian bonds played. The index of the Russian Government Bond Index rose to five-year highs on expectations of a more rapid rate cut: the inflation slows down to this. In particular, at a meeting of the Central Bank of Russia on September 15, the rate is expected to decrease by either 0.25% or 0.5%.
From our point of view, all the positive factors for the ruble are already embedded in the price. Of course, the ruble may gain a little more momentum due to inertia. But, in our opinion, right now it is possible to take a closer look at buying foreign currency, especially since in the autumn the ruble is traditionally weak. Last Friday, the Russian currency lost some positions (along with other currencies carry trade – Brazilian real, Turkish lira, Mexican pesos). We expect that this week the dollar / ruble exchange rate will rise to 57.5 rubles, and the euro / ruble to 69 rubles.