June 08, 2021
EUR/USD: The euro climbed against the dollar yesterday as an impending gathering of the European Central Bank on Thursday kept investors cautious. The European Central Bank will adjust its bond-buying program set to last until March 2022 to avoid rising borrowing costs and hindrance to economic recovery. CFTC Positioning Report showed that EUR gross long positions increased and pushed net longs to early March levels just below the 110K contracts. As usual in past weeks, the recovery in Europe mixed with the vaccination progress and better results from domestic macroeconomics data provoked traders to increase long positions. The EUR/USD rebound due to the decline of the US dollar across the board occurred after the greenback had been unable to recover from the Payrolls report released on Friday, which triggered its massive weakness.
GBP/USD: The British pound showed a bullish dynamic against the dollar on Monday, despite doubts about the government’s plan regarding quarantine restrictions on COVID-19 in England to be lifted completely on June 21st. The rapid vaccination process in the UK raised expectations for a quick reopening of the economy, but experts reported that England sees rises of COVID-19 Delta variant, first detected in India, which led to calls to push back the reopening date. GBP net longs declined to 4-week lows, as doubts seem to persist around the full reopening of the UK economy despite its current improvement and the positive news in general.
WTI: WTI oil started the trading day showing a bearish dynamic despite the fact that it had managed to climb back to its October 2018 highs during the early American session yesterday. Chinese data showed that crude oil imports fell to a year’s low in May, affecting a fragile oil price recovery. This comes on the back of last week’s agreement between OPEC and its allies to follow the supply restraints until July. Moreover, hopes of increasing Iranian oil exports pressured the black gold during the first half of the Monday trading session. Crude has risen for two weeks, with Brent up by 38% this year and WTI rising 43% on expectations of improved demand. Meanwhile, yesterday OPEC’s Secretary-General reported that OPEC+ expects oil inventories to fall further in the coming months. All in all, increased global demand is anticipated amid positive decisions by the United States and Europe regarding COVID-19 restrictions, as well as India, that has begun to ease its recent lockdown too.