Forex Traders Weekly Outlook – Intervention Noise Grows Louder with Rampaging US Dollar

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    Forex Weekly Analysis and Outlook – US Dollar, Euro, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar, Australian Dollar, New Zealand Dollar,
    [See the full post at: Forex Traders Weekly Outlook – Intervention Noise Grows Louder with Rampaging US Dollar]


    Euro bounces on hawkish Bundesbank President Joachim Nagel
    #EURUSD +1.6% to $1.0198 highest since March 2022
    #EURGBP broke key downtrend line highest since February 2021 at 87.22 pence, triggering stop losses

    Short Positions

    Investors have only been this short the common currency five times in the last two decades, according to custody data from Bank of New York Mellon. Still, while this reflects the gloomy outlook, it’s also making investors wary of adding to these positions.

    “To justify clients adding to these shorts, we have to say the euro is facing existential issues or the financial system is facing systemic risks, neither of which is a reasonable assessment of the Eurozone’s current predicament” said Geoffrey Yu, a senior strategist at the bank. “The burden of adjustment is clearly towards taking off short euro positions.”


    GBP is oversold and undervalued; BOE on track to hike 75bps – Credit Agricole

    GBP/USD up 112 pips today

    “The UK rates markets are attaching a c.85% chance to a 75bp rate hike this week [meeting moved to Sept 22 due to the Queen’s death] and expect the bank rate to peak at c.4.25% next year. While we think that the MPC would try to live up to and even exceed the market rate hike expectations, we worry that policymakers could remain divided on the need for further aggressive rate hikes from here,” CACIB notes.

    “Also of interest for investors will be any indications that the BoE may be forced to slow down the pace of reduction of its balance sheet in light of the recently announced government spending plans. In all, while we still see the GBP as oversold and undervalued at current levels, we maintain a cautious outlook on the currency,” CACIB adds.


    US dollar correction continues ahead of CPI

    #EURUSD up 0.5% to 1.0170 levels
    #GBPUSD up 0.4% at 1.1720
    #USDJPY down 0.5% to 142.18
    #USDCAD down 0.3% to 1.2960
    #AUDUSD up 0.3% to 0.6910

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