Euro Dollar Exchange Rate Outlook: CFTC Data Shows Achieving Gains Through 1.34 Expected to be Difficult

The Euro (Currency:EUR) is softer across the board on Monday afternoon in London:

• The Euro Dollar exchange rate is 0.18% down on Friday night's closing rate; EUR/USD has been quoted at 1.3199.
• The Euro Pound exchange rate is 0.64 pct lower at 0.8475.
• The Euro Swiss Franc exchange rate is 0.22 pct higher at 1.2322.

Please note: These are spot quotes, your bank will affix a discretionary spread to the above figures. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more here.

Latest CFTC Data and Euro Dollar Exchange Rate Outlook

Net non-commercial long EUR positioning on the CME on August 27 was at its highest level since July 2011 when EUR/USD was trading up at 1.45.

"While the decline in EUR/USD over the last week suggests this position has been reduced, it is still significant enough to make any renewed EUR gains through 1.34  hard to achieve without something more compellingly positive emerging on the European economy," says a currency note from Lloyds Bank Research.

Lloyds go on to say that while the recent European data has certainly been more encouraging, it’s a long way from being strong enough to make the ECB reconsider their bias to ease, especially with the inflation numbers still edging lower:

"In spite of the rise in long EUR positions, net long USD positions actually rose modestly in aggregate in the week to August 27, due to a rise in short JPY, AUD and CAD positions.

"Nevertheless, positioning is now comparatively moderate from an aggregate perspective, and the difference between positioning in
the EUR and other currencies highlights the potential for cross movement.

Data from the major US futures & options exchanges (CFTC) are released each Friday evening and report positions up to the close of business on the previous Tuesday. Traders are classified as either commercial or non-commercial.

The positioning of the non-commercial traders can be used as a proxy for the speculative side of the market.