crash™teamracingnitrofueledpc| Bet on weaker inflation! Dollar shorts surge

What I saw on Wall Street

Traders are generally bearish on the dollarCrash ™teamracingnitrofueledpcIt is expected that weak CPI data will put pressure on it. The Fed hinted that it would not raise interest rates immediately.Crash ™teamracingnitrofueledpcInterest rates may be cut, adding to the downward pressure on the dollar By contrast, the market is optimistic about the outlook for the euro, with bullish bets hitting a record high.

Currency traders generally expected the dollar to fall before the US CPI was announced in April.

Data from the options market suggest that traders are already accumulating bearish bets on the dollar, with the dollar's risk reversal index falling below parity in a week. For the first time in two months, it also means the market expects weak CPI data to put pressure on the dollar.

On Tuesday, Federal Reserve Chairman Colin Powell reiterated that raising interest rates is unlikely to be the central bank's next move, prompting traders to refocus on the outlook for monetary easing this year, putting downward pressure on the dollar. Kyle Chapman, a foreign exchange market analyst at Barringer, said the weak data could ignite hopes that the Fed would cut interest rates in the summer, undermining the dollar's yield advantage.

Economists predict that the US CPI in April will rise from 3. 3 in the previous month.Crash ™teamracingnitrofueledpc.5% slows down to 3Crash ™teamracingnitrofueledpc.4%. If the inflation data are in line with or lower than expected, it will consolidate the Fed's expectations of two interest rate cuts this year. The Bloomberg dollar spot index fell on Tuesday as Mr. Powell called for patience with inflation.

Data from the Commodity Futures Trading Commission for the week ended May 7 also showed that traders were withdrawing large bullish bets on the dollar.

Historical data show that the dollar usually falls after inflation data cools. Inflation figures have been lower than expected three times in the past year, and each time the dollar fell significantly at the end of the trading week. By contrast, the market is particularly optimistic about the future of the euro. The relative premium of common currency call options, the bet that the euro will appreciate next week, has risen to its highest level since February.

Howard Du and Vadim Iaralov, strategists at Bank of America, said European investors had completely closed their long positions in the dollar over the past month. As a result, the company was bullish on the euro against the dollar ahead of the US inflation data.

Tags：

Article Copyright Statement: Unless otherwise specified, all articles are jiliasia16 com original. Reproduction or reproduction should be in the form of hyperlinks and indicate the source.