US Markets

BUZZ-COMMENT-Dollar supported by a number of factors for now

Credit: REUTERS/Marcos Brindicci

Market uncertainty, the large speculative dollar short and major technical support will limit the downside in coming sessions.

Oct 19 (Reuters) - Market uncertainty, the large speculative dollar short and major technical support will limit the downside in coming sessions.

The dollar on Monday has been stable, with investor worries about rising coronavirus cases, the looming U.S. election and fading prospects of any fiscal stimulus beforehand providing support . If Joe Biden wins and the Democrats take control of the Senate, that would probably result in larger stimulus, which would be negative for the dollar.

Data for the week ending Oct. 13 show the net short USD position held by speculators dipped to $27.2 billion from $28.4 billion the previous week. However, the sheer size of the remaining speculative short position shows the risk for a bigger squeeze higher.

USD index, which tracks the dollar versus a basket of six currencies, found support in August and September ahead of the 91.729 Fibonacci level, a 76.4% retrace of the 88.251 to 102.99 (2018 to 2020) rise.

Dollar positioning is derived from net contracts of IMM speculators in the euro, yen, British pound, Swiss franc and Canadian and Australian dollars.

For more click on FXBUZ

IMM USD Positions Chart: https://tmsnrt.rs/347wTmF

Monthly Chart: https://tmsnrt.rs/2HhCf61

(Martin Miller is a Reuters market analyst. The views expressed are his own)

((martin.miller@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More