- Euro back near 1.19 and 2-year highs after one week pullback
- US dollar index drops back to 2020 lows
- Better US housing data offers no solace to the dollar
- No stimulus deal yet
EUR/USD was up by 63 pips (+0.52%) to 1.1932 as of 5pm GMT. This week the euro is higher by 0.78%.
The currency pair rose steadily throughout the day, getting an extra quick leg up beyond 1.19 as New York trading got underway. Yesterday it rose 0.24%.
EUR: Euro long positions send euro to 2 year high
The euro continues to rise on a daily and weekly basis, despite rising evidence the market for the currency is ‘frothy’ by historical standards.
Commitment of Traders (COT) data from the CFTC shows seven weeks on the trot of rising Euro-long positions. The implication is that more investors are placing trades to benefit from a stronger euro via futures and options markets. In the week through August 11, investors had the biggest net long position in the euro since the records started in 1999.
Contrarian investors would interpret the findings as suggesting a crowded trade, however the upwards trend is clear and many are betting on a new era of Euro outperformance.
USD: Mnuchin says some states ready for $300 payments by President
Rising optimism about the economic prospects for Europe after the EU Recovery fund was passed, the lack of a stimulus deal, rising US election risk and a lack of desire for havens are some reasons the US dollar is dropping.
Comments from Treasury Secretary Mnuchin offered the latest insight into the chances of a new US stimulus deal being signed soon, and what it might look like. Mnuchin said five states have already been approved for the $300 per week extra unemployment payments, with 19 in process.
The only economic data was on housing. July housing starts were better than expected at 1,496,000 versus 1,245,000 expected, up 22.6% month over month.