US Dollar Rallies Slightly Higher, but Still Under Increased Selling Pressure

The US dollar today rallied higher during the North American session despite the increased selling pressure on the currency, according to the latest CFTC report. The selling pressure on the greenback stems from last week when the currency did not post any improvements, despite the positive nonfarm payrolls.

The greenback’s performance, as tracked by the US Dollar Index, was lacklustre during the European session but improved drastically during the American session as the Index hit 99.00. 

The US dollar, as tracked by the US Dollar Index, was performing poorly during the early European session as markets priced in Emmanuel Macron‘s win in the second round of the French presidential election. However, as from 10:00 GMT, the US dollar posted significant gains against the euro and other major currencies. This was a reversal of Friday’s trend when the positive nonfarm payrolls numbers did little to boost the US dollar against the euro.

The latest CFTC report also indicated that the net longs on the US dollar were at their lowest level last witnessed in early October 2016 for the week ended May 2. This report indicates that the markets are currently risk-averse, which is the reason for the increased selling pressure on the greenback.

Given that this week heralds an empty US economic docket, the greenback’s future performance is likely to be tied to comments from Federal Reserve speakers, Donald Trump and market risk sentiment until Friday.

The EUR/USD was trading at 1.0930 as at 18:07 GMT having dropped from a daily high of 1.0996. The USD/JPY was trading at 113.06 having risen from a daily low of 112.35.

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